A significant change is occurring in enterprise cloud strategy as private cloud platforms transition from being a supporting element to a central component in IT modernization. This conclusion stems from the recent "Private Cloud Outlook 2025" report, which was based on a global survey conducted by Illuminas and commissioned by Broadcom. The study indicates a widespread reevaluation of cloud priorities across various industries, motivated by growing concerns related to costs, security, and the deployment of artificial intelligence (AI) workloads.

The survey gathered insights from 1,800 senior IT leaders across North America, Europe, and Asia Pacific. It revealed that 69% of organizations are contemplating migrating workloads from public to private cloud environments. Notably, 53% pinpointed this migration as their primary IT infrastructure goal for the next three years, and one in three organizations has already begun the process of moving workloads back from public cloud platforms.

Prashanth Shenoy, Vice President of Product Marketing at VMware Cloud Foundation at Broadcom, emphasized the report’s findings, stating, "private cloud is a strategic platform for IT modernization." He noted that as businesses encounter heightened demands to enhance performance, maintain compliance, and control costs, there is a conscious shift towards designing hybrid environments that balance control, efficiency, and flexibility.

The report also underscores the private cloud’s increasing importance in AI initiatives, with 55% of respondents expressing a preference for running AI model training and inference in private cloud settings, citing improved security and predictable performance. Additionally, 66% of organizations favor hosting containerized and Kubernetes-based applications on either private clouds or hybrid configurations that blend public and private platforms.

Security and compliance stand out as fundamental concerns driving this shift. An impressive 92% of respondents conveyed a stronger trust in private clouds for handling compliance-heavy workloads, while 66% reported significant worry regarding compliance risks associated with public cloud environments. Data privacy issues emerged as a key barrier to adopting generative AI, with 49% highlighting it as a critical factor.

Financial predictability is another pivotal rationale for this trend. Although public clouds are often associated with agility and scalability, a staggering 94% of IT leaders admitted to financial waste resulting from unused or underutilized public cloud services. Nearly half acknowledged wasting over 25% of their public cloud budget, reinforcing the case for seeking better visibility and cost control through private cloud implementations.

However, the report identifies two major challenges: a lack of in-house skills and fragmented IT teams. About 33% of respondents noted that siloed IT structures hinder private cloud adoption, while 30% pointed to a deficiency of internal expertise. Nonetheless, the study observed a movement towards more integrated team structures, with 81% of technically advanced organizations adopting centralized platform teams instead of functionally siloed ones. This change may help bridge the skills gap and reduce dependence on external resources.

In conclusion, the concept of a "cloud reset" is no longer a hypothetical scenario but an observable trend across industries, from financial services to healthcare, as CIOs and IT leaders adjust their cloud strategies. With its capacity to support high-performance applications, compliance-driven workloads, and AI development, private cloud infrastructure is increasingly regarded as a strategic equal, if not a preferred option, for large-scale digital transformation efforts.

The "Private Cloud Outlook 2025" study was executed between March 6 and April 4, 2025, with participants from small, medium, and large organizations across sectors such as government, healthcare, insurance, and pharmaceuticals. The study adhered to definitions from NIST and Broadcom, classifying private clouds as dedicated infrastructures managed by a single entity, whether in-house or via a third-party provider, while public clouds were defined as shared infrastructures offered by external vendors, excluding software-as-a-service platforms.

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