About this article: AI-assisted writing, reviewed against the cited sources. This is source research, not lab validation. Check the stated versions and your own requirements before making changes.
"Private cloud" appears in hosting offers to mean quite different things: a whole data centre run for one organisation, a set of physical servers reserved for one customer, or virtual servers in a separate network on hardware shared with others. All three can be reasonable products. They give different isolation, and they cost different amounts.
This article sets out the standard definition, the isolation levels that public cloud providers document, and the questions that pin down what an offer means.
Why it matters
Isolation affects performance (see the companion article on noisy neighbours), some licensing terms, and what a business can tell its auditors or customers. A decision based on the label rather than the details can pay for isolation it does not get, or miss isolation it needs.
How it works
The standard definition
The US National Institute of Standards and Technology's definition of cloud computing, SP 800-145, is a widely used reference for these terms. It defines a private cloud as cloud infrastructure provisioned for the exclusive use of a single organisation with multiple consumers, such as business units. It may be owned, managed and operated by the organisation, a third party, or both, and it may exist on or off premises.
The same document lists resource pooling as one of the five essential characteristics of cloud computing: the provider's resources are pooled to serve multiple consumers in a multi-tenant model. In a private cloud, those consumers belong to one organisation. A public cloud, in NIST's terms, is provisioned for open use by the general public. NIST also defines a community cloud, for exclusive use by a group of organisations with shared concerns such as security or compliance requirements, and a hybrid cloud, made of two or more distinct cloud infrastructures that remain separate entities but are bound together.
On that definition, a third-party provider can run a private cloud for a customer, but the infrastructure is for that customer's exclusive use. Virtual servers in a dedicated network segment on hardware shared with other organisations do not meet it, whatever they are called.
Levels of isolation the large providers document
Public cloud providers sell several levels and describe them precisely, which makes them useful reference points.
| Level | What is dedicated | Source |
|---|---|---|
| Shared tenancy | Nothing physical. AWS states that by default multiple AWS accounts might share the same physical hardware. | AWS |
| Dedicated instance | The physical server runs only one account's instances, but the customer has no visibility or control over placement | AWS |
| Dedicated host | A whole physical server for one customer, with visibility of sockets and cores | AWS, Azure |
Microsoft describes Azure Dedicated Host as physical servers assigned to one Azure subscription, and states that No other customer's VMs will be placed on your hosts. Microsoft adds a limit worth noting: dedicated hosts are in the same data centres and share the same network and underlying storage infrastructure as other hosts.
That last point applies in general. Dedicating a physical server isolates its processors and memory. Storage and network can still be shared unless the offer says otherwise.
What dedication changes
- Processor and memory contention from other customers is removed on a dedicated host. Contention between your own VMs on that host remains, and you manage it.
- Licensing. AWS states that Dedicated Hosts support existing per-socket, per-core or per-VM licences, subject to your licence terms. Some licence terms depend on physical cores, which a shared server does not expose. Check the specific licence; this is not licensing advice.
- Maintenance timing. Microsoft states that Azure Dedicated Host customers can opt in to a maintenance window for platform-initiated maintenance.
- Cost. A dedicated host is paid for whether or not it is full.
What to choose and why
Questions that establish what an offer means:
- Are the physical hosts running my servers used by any other customer?
- Is the storage behind my servers shared with other customers? If so, how is it divided and limited?
- Is the network equipment shared, and how is my traffic separated?
- Who can administer the hosts, and is that access logged?
- Can I see the number of physical sockets and cores if my licensing depends on it?
- What happens when a host fails: where do my servers restart, and is that capacity also dedicated?
A business with standard workloads and no licensing or compliance driver may be well served by shared tenancy with good resource controls. Dedicated hosts suit licence terms tied to physical cores, contractual isolation requirements, or workloads harmed by contention. Make the choice from these answers, not the label.
A hypothetical comparison
Two invented offers both called "private cloud":
- Offer A: virtual servers in your own network segment on a shared cluster, with shared storage.
- Offer B: two physical hosts reserved for you, with your own storage volumes on a shared storage array.
Offer B dedicates processors and memory; Offer A dedicates none. Neither dedicates the storage hardware. Only the questions above reveal this. The offers are invented for illustration.
Risks and limits
- Definitions vary. NIST's definition is a reference, not a law governing product names; providers may use the term differently.
- Dedicated hardware is not complete isolation. Shared storage, network and administration remain unless stated.
- Failover capacity matters. A single dedicated host with no reserved spare has nowhere dedicated to restart.
- Licensing is term-specific. Read the actual licence terms or ask the licensor.
- No commands are given here.
Sources
Opened 14 November 2026.
- NIST: SP 800-145, The NIST Definition of Cloud Computing, September 2011 (final; PDF).
- AWS: Amazon EC2 Dedicated Instances.
- AWS: Amazon EC2 Dedicated Hosts.
- Microsoft Learn: Overview of Azure Dedicated Hosts for virtual machines; displayed Last updated: 2026-09-27.
Related service: Cloud hosting.
Related future topics
- Noisy neighbours in a shared cloud.
- Are your redundant servers on the same physical host?
- Provider administrator access in managed hosting.
Learning notes
- NIST defines private cloud as infrastructure for one organisation's exclusive use, on or off premises.
- Shared tenancy, dedicated instances and dedicated hosts isolate different things.
- A dedicated host can still share storage and network.
- Licensing tied to physical cores can require dedicated hardware; check the terms.
- Ask specific questions; the label alone does not say what is dedicated.
This article was originally published on .