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Cloud Terms Explained
Understanding the Differences Between Public, Private, and Sovereign Clouds
Public, private, and sovereign clouds are often conflated—yet they describe different aspects of modern IT architectures. Clearly distinguishing between them lays the groundwork for informed decisions and paves the way toward a so-called “smart cloud.”
“A private cloud is more secure than a public cloud.”
“For regulated data, we need a sovereign cloud.”
We hear statements like this all the time in projects—and they are often only partially correct. The reason for this is rarely a lack of expertise, but rather an inconsistent understanding of the underlying concepts.
Especially in the context of cloud sourcing and regulated industries, this can quickly lead to misunderstandings—and, in the worst case, to poor architectural decisions. After all, when people work with different definitions, they inevitably reach different conclusions.
In this blog, we will therefore establish a common framework and systematically distinguish between the most important cloud models.
Why clear terminology is crucial
The cloud is no longer just a trend; it has long been a central component of modern IT strategies. The key question is no longer whether companies use the cloud, but how and for what purposes.
This makes it all the more important to have a clear understanding of the terminology. In practice, however, technical concepts, marketing terms, and regulatory requirements are often conflated. As a result, solutions that appear comparable actually have very different characteristics. In other words, if you don’t clearly distinguish between these terms, you’re comparing apples and oranges.
What exactly is the "cloud"?
Before we distinguish between public, private, and sovereign clouds, it’s worth taking a step back.
One of the most commonly cited references is the definition provided by the National Institute of Standards and Technology (NIST). It describes cloud computing as the delivery of IT resources over a network that can be accessed flexibly, scaled as needed, and paid for based on usage.
Five key characteristics are essential here:
- On-demand self-service
Resources can be provisioned without manual intervention - Broad Network Access
Access is provided via standardized networks - Resource Pooling
Resources are pooled and used efficiently - Rapid Elasticity
: Capacity can be scaled quickly - Measured Service
: Usage is measured and billed based on actual consumption
These characteristics are so important because they allow for a clear distinction. If they are missing entirely or in part, the solution is often not a cloud in the true sense of the word, but rather traditional hosting or a modernized data center.
This distinction is crucial, particularly for correctly understanding the concept of a private cloud.
Public Cloud
The public cloud is the most widely used cloud model today. In this model, IT resources are standardized by a third-party provider and delivered in a highly scalable environment that is used by multiple customers simultaneously.
For businesses, this means one thing above all else: maximum flexibility. Capacity can be adjusted dynamically, new services can be rolled out quickly, and billing is typically usage-based.
At the same time, some of the responsibility shifts to the provider. This dynamic is often described as the “shared responsibility model.” While the provider operates the underlying infrastructure, the customer remains responsible for aspects such as configuration, access control, and data classification.
Private Cloud
In practice, the private cloud is often misunderstood—not least because the term is used in a variety of ways.
Essentially, it refers to an environment that is operated exclusively for a single organization and offers cloud-like features. Unlike the public cloud, it is a single-tenant architecture running on dedicated hardware that provides a higher degree of control.
In this context, it is important to understand the term “provider” correctly. It refers to the organization that operates the private cloud and provides the corresponding services. This can be either an external service provider or—in the case of a self-managed environment—the internal IT organization. Technology or hardware vendors merely provide the foundation but do not necessarily assume the role of the provider.
The key point, however, is this:
A private cloud is only a “cloud” if it actually meets the core characteristics of a cloud.
In many cases, this is not the case. Instead, these are virtualized data centers that may appear modern but offer neither true elasticity nor usage-based billing. The term “private cloud” is often more of a label than an accurate technical description in this context.
Sovereign Cloud
While public and private clouds are relatively clearly defined, the term “sovereign cloud” currently leaves a great deal of room for interpretation.
At its core, this is not about a standalone cloud model, but rather about additional requirements. A sovereign cloud, therefore, does not describe a new type of infrastructure, but rather a cloud environment that is supplemented by specific control mechanisms. A sovereign cloud is thus not an alternative to public or private clouds, but rather an additional layer that can be built on top of both models.
The goal of this expansion is to specifically address requirements related to data sovereignty, compliance, and the legal framework.
To better understand the concept, it is worth taking a look at the key dimensions that make up cloud sovereignty.
One key consideration is data residency. This refers to where data is physically stored and processed. In many scenarios, it is necessary for data to remain within specific geographic boundaries, such as in Switzerland or within the EU. Issues such as replication and backup locations also play a role here. At the same time, experience shows that data residency alone does not guarantee complete sovereignty—it is merely a necessary foundation.
Closely related to this is access control. It addresses the question of who actually has access to data and systems—both from a technical and an organizational perspective. This involves, among other things, the use of encryption, key management, the restriction of provider access, and the complete traceability of all activities. It is crucial that not only is unauthorized access prevented, but that authorized access is also clearly controlled and documented.
One factor that is often underestimated is the operating model. It describes who operates the cloud environment and under what conditions this takes place. In sovereign setups, care is often taken to ensure that operations and support are handled by clearly defined, geographically limited organizational units. The separation of roles and responsibilities also plays an important role. Operations are therefore not just a technical issue, but also an organizational one.
Finally, legal jurisdiction constitutes the fourth dimension. It refers to the legal framework governing the data and systems. This involves, in particular, issues of jurisdiction, potential access rights of public authorities, and the legal status of the provider. This dimension is often the most complex, as it cannot be managed through technical measures alone.
What matters is not any single dimension, but how they interact. True data sovereignty can only be achieved when all four dimensions are considered together.
An example illustrates this point: Even if data is stored exclusively in Switzerland, sovereignty may be limited if, at the same time, unauthorized access is possible or the provider is subject to foreign law. In such cases, sovereignty is only apparent, not complete.
The key distinction: model vs. requirements
One key point is often overlooked in many discussions. Public and private cloud describe how infrastructure is delivered. Sovereign cloud, on the other hand, describes the conditions under which this occurs.
While public and private clouds are deployment models, the sovereign cloud represents an additional layer of requirements. This distinction is crucial for making informed decisions.
The Path to the Smart Cloud
Public, private, and sovereign clouds are not competing concepts, but rather describe different aspects of modern IT architectures. The question is not “which cloud,” but rather which combination of models and controls best meets an organization’s needs.
In this context, the term “Cloud Smart” has also become established in recent years, largely thanks to Gartner. It describes the shift from one-size-fits-all cloud strategies toward nuanced, application- and context-specific decisions.
Building on this, we use the term “Smart Cloud” to describe precisely this approach: the deliberate combination of various deployment models and control mechanisms, tailored to the specific requirements of an organization.
A Smart Cloud can, for example, combine public cloud services with targeted sovereignty controls or deploy private cloud components where they make sense. Thus, a Smart Cloud is not created by choosing a single model, but through the targeted interplay of technologies, operating models, and control mechanisms—tailored to the specific requirements of an organization.
