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What is a local cloud?

A local cloud is a dedicated cloud service that is managed by a third party and runs on-premises. A Local cloud includes provisioning of physical infrastructure, software and full lifecycle management by the third party service provider.

Also known as local cloud as a service (LCaaS), this type of service offers a flexible cloud-style consumption model  of private cloud resources that are deployed on-premises and dedicated to an individual organization, where the cloud service provider takes responsibility for and maintains control of software maintenance such as patches and upgrades for all pre-bundled software in the cloud platform, regardless of its physical location.

LCaaS solutions available in the industry include VMware Cloud on Dell EMC, AWS Outpost, Microsoft Azure Stack, Google Anthos, and Oracle Dedicated Region Cloud@Customer.



How do you create a local cloud?

Local clouds are provisioned like other cloud services, with two major distinction. First, In the LCaaS model, the cloud infrastructure and software (OS, middleware, application) are provisioned as a unit, rather than as individual pieces. Second, where cloud infrastructure typically resides in the public cloud provider data center, LCaaS instances can be deployed at the organization’s own data center, in a third party colocation data center, or at the edge. Even though the infrastructure may reside in a customer’s own premises, responsibility for maintenance and management falls to the cloud service provider offering the service.

Once provisioned, the cloud service provider maintains all the underlying hardware and software necessary to keep the platform up-to-date. Once activated, end-user organizations consume the service as if it were any other cloud service.



How does a local cloud work?

Local clouds work like any other cloud platform. Cloud infrastructure and applications are accessed via network connections, and cloud providers maintain the platform, leaving the end user organization to consume the infrastructure services without the need to perform routine maintenance.

For example, the VMware Cloud on Dell EMC LCaaS combines VMware Cloud software with Dell EMC infrastructure, and fully automated lifecycle management for both the hardware and the software. VMware manages the LCaaS platform, monitors the health of the entire stack, and utilizes a shared responsibility model for compliance and security. Ongoing maintenance and repair for both the software and hardware is included in the service at no additional charge.



Why is local cloud important?

Many organizations are required to store sensitive information in specific geographies, which may be different from a cloud provider’s own data centers. For example, the European Union’s General Data Protection Regulation (GDPR) specifies where personally identifiable information (PII) of its citizens may be stored. Additionally, highly regulated industries like financial services, legal institutions, and gaming have regulatory governance mandates that specify that transactions occur in and information is stored in a specific state or locality.

Cloud service providers can offer LCaaS deployments that reside in specific geographies – even in a customer’s own data center location – to ensure that governance and regulatory compliance issues are being met.

Performance and latency can also impact the location of local cloud storage. Organizations that process large amounts of data may wish to reduce the round-trip latency or lower bandwidth costs by locating data and processing where data is being created or consumed. Having local cloud storage on-premises can greatly improve overall performance while reducing bandwidth expenditures.



What are the benefits of a local cloud server?

A recent IDC study found that primary drivers for opting for flexible consumption models such as a local cloud as a service are:

  • Enablement of a predictable cost model
  • The promise of faster refresh of IT systems and devices
  • Increased procurement efficiency
  • Reduced IT staff footprint

This calls of a rethinking about consumption of IT resources, as processing and intelligence increasingly moves to the edge, powered by IoT, AI, and machine learning.

The trend toward LCaaS is expected to have its greatest impact in urban core industries such as hospitals, factories, and transportation hubs, especially where there is a demand for local edge environments where users demand a better edge performance experience powered by 5G and WiFi6.

Some innovation areas fueling LCaaS include augmented and virtual reality (AR/VR), Internet of Things (IoT), robotics, autonomous vehicles, 3D printing, cognitive/artificial intelligence (AI), and rapid image processing. These technologies, built on cloud, demand smart edge (LCaaS) locations where IT, operational technology (OT), and the customer experience (CX) intersect.


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