Why is private cloud cheaper than public cloud?

Is a public cloud really more expensive than a private one?

Many people believe that choosing a private cloud means spending much more than using a common public cloud.

This idea has become popular, in part, because large public cloud providers often offer rates that, on paper, seem highly competitive.

However, when analyzing real costs, included services, and the way companies use these infrastructures in detail, we find that this perception does not always match reality

In this article, we are going to debunk the myth that a public cloud is cheaper than a private cloud, and we will do it using concrete examples of prices and configurations.

Public cloud vs. private cloud: a fundamental difference

Before looking at numbers, it’s important to understand the difference between these two types of cloud. A public cloud is a shared service, where multiple companies use the same physical infrastructure, although virtually isolated.

Clear examples of public providers are Amazon Web Services (AWS), Microsoft Azure, or Google Cloud. Their prices are usually based on usage: you pay for CPU, storage, or bandwidth according to what you use.

On the other hand, a private cloud is characterized by offering an infrastructure dedicated exclusively to your company. This means all hardware and resources are yours, without sharing with third parties, and with full control over configuration, security, and performance.

An example is Naranjatec Private Cloud, which provides fully isolated, scalable, and customized environments for each client. The bill is based on real consumption, with full transparency about what you are paying.

Beyond cost, a private cloud offers advantages that are not always easily quantified but directly impact return on investment:

Full control: The company can configure the infrastructure according to exact needs, without relying on limitations of public providers.
Security and compliance: Data remains isolated and is managed under strict policies, facilitating compliance with data protection regulations.
Dedicated human support: Naranjatec provides a technical team with names, available to resolve any incident, unlike the call centers of large public providers.
Planned scalability: Although a public cloud allows automatic scalability, in practice this can generate unexpected costs. With a private cloud, scalability is planned according to real needs, avoiding surprises on the bill.

The ‘introductory offers’ of the public cloud: beware of the trap

One of the most common arguments in favor of the public cloud is that they offer very low prices during the first few years.

For example, AWS, Azure, or Google Cloud often give discounts for new customers, free instances, or credits that make, at first glance, the monthly cost seem ridiculously low.

However, these offers usually last 12 to 36 months, and afterward the real prices are much higher.

Additionally, when using public services intensively, a technological dependency is created: your applications, databases, storage, and networks are configured according to the provider’s specific architecture.

This is known as vendor lock-in, making it very complicated and costly to switch to another provider or migrate to a private cloud.

Suddenly, what seemed cheap turns into a high expense, because you are paying not only for the resources, but also for the complexity of moving your data and systems.

Myths about the initial investment

Many people still think that setting up a private cloud means spending a fortune from day one. And yes, in older models it was like that: buying servers, paying for licenses, building racks… an expensive mess.

Here, the initial investment is handled by us. We buy the hardware and maintain it. The client doesn’t pay a euro in CAPEX.

They only pay for their real consumption each month, with a minimum of €1,375. Simple, clear, and without surprises.

The advantage?

You forget about eternal amortizations, justifying huge investments, and being tied to equipment that is already old in three years. Everything becomes pure OPEX: you pay for what you use and that’s it, with a stable, predictable bill and no fine print.

In short: we provide the infrastructure, you keep the control, flexibility, and peace of mind. All the power of a private cloud, but without the toll of a “large initial outlay.”

Case study

Let’s imagine a medium-sized company that needs three nodes with enough storage for its critical applications. In a public cloud, it could choose EC2 instances on AWS and EBS storage.

Each instance would cost around €300 – 500 per month, and storage another €200 – 300, totaling €1,800 – 2,300 per month. But what these “giants” don’t tell you is that when adding advanced support, automatic backups, geographic redundancy, and network traffic, the real cost easily doubles to reach €3,500 – 4,000 per month or more.

If the same company decides to implement a private cloud with Naranjatec, the monthly cost for similar usage would be approximately €2,750, including dedicated infrastructure, expert support, and personalized management.

This shows that for an environment with serious security, availability, and performance requirements, a private cloud can be more economical and efficient than relying solely on the public cloud.

In conclusion, is a public cloud really cheaper than a private cloud?

When deciding between a public cloud or a private cloud, it’s not enough to stick with the idea that “public is always cheaper.”

The reality is that costs depend on many factors: how much it is used, how important security is, the support needed, and how efficiently the infrastructure is managed.

Examples with numbers show that for companies with critical needs and a strategic approach to infrastructure, a private cloud can be just as competitive… and even more profitable in the medium and long term!

In short, the choice between public cloud or private cloud should come from a complete analysis of costs, risks, and benefits.

If transparency in billing, service customization, and human support are valued, a private cloud is not only attractive but also a solid and financially smart option for any company.

FAQ

Which cloud provider is actually the cheapest?

The honest answer: the cheapest cloud is the one that eliminates hidden costs and adapts to your needs.

The “Hyperscaler” Trap: The big players lure you in with low entry prices, but the meter starts running fast. You end up paying for every gigabyte of data transfer (egress fees), every API call, and even for basic technical support like chat.
The Naranjatec Solution: Our Private Cloud is significantly more cost-effective in the long run because we use a fixed pricing model. By utilizing a resource pool (a dedicated bundle of CPU, RAM, and storage), you know exactly what your bill will be at the end of the month—no surprises, even during traffic spikes.

Is Google Cloud actually cheaper?

For most tech-focused SMEs, the answer is no. As César Maz from Punt Sistemes pointed out, Google Cloud is often overkill.

The Complexity Tax: Google is built for global conglomerates. For companies looking for efficiency, their platform is often unnecessarily complex and expensive to manage.

Variable vs. Stable Costs: With Google, your bill can skyrocket if your usage fluctuates even slightly. At Naranjatec, you get dedicated resources for a flat fee. This typically results in a 20% to 30% saving compared to an unoptimized public cloud environment.

Which cloud hosting is the best choice?

“The best” isn’t the biggest; it’s the one that gives you control, performance, and peace of mind. Naranjatec is the go-to for companies tired of the anonymity of the tech giants:

Data Sovereignty: For European companies, local storage is a must. Naranjatec operates data centers in the Netherlands and Spain. Your data stays fully compliant with EU regulations (GDPR), far away from the legal uncertainties of US-based providers.
Support with a Human Face: With the giants, you’re just a ticket number. At Naranjatec, you have a direct line to engineers who actually know your infrastructure. We thrive on proactive support—we’ll often call you before you even realize there’s an issue.
Peak Performance without “Neighbors”: In a public cloud, you share hardware with thousands of others. With Naranjatec, you get a 100% private environment. No “noisy neighbors”—just the full power of our NVMe storage dedicated exclusively to your applications.

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