A shift in enterprise cloud strategy is underway, as private cloud platforms move from a supporting role to a central pillar in IT modernization. That’s the central takeaway from the newly released ‘Private Cloud Outlook 2025’ report, based on a global survey conducted by research firm Illuminas and commissioned by Broadcom. The findings suggest a broad reassessment of cloud priorities across industries, driven by mounting concerns over cost, security, and the practical deployment of AI workloads.
The survey, which gathered responses from 1,800 senior IT leaders across North America, Europe, and Asia Pacific, reveals that 69% of organizations are considering moving workloads from public to private cloud environments. More significantly, 53% of respondents indicated that migrating workloads to private cloud is their top IT infrastructure priority over the next three years. Already, one in three organizations has begun repatriating workloads from public cloud platforms.
“This report makes it clear: private cloud is a strategic platform for IT modernization,” said Prashanth Shenoy, Vice President of Product Marketing for VMware Cloud Foundation at Broadcom. “As organizations face increasing pressure to optimize performance, ensure compliance, and manage costs, they are purposefully designing hybrid environments that provide the right balance of control, efficiency, and flexibility.”
Supporting AI Initiatives
The survey also highlighted the private cloud’s growing role in supporting artificial intelligence initiatives. Fifty-five percent of respondents prefer to run AI model training, tuning, and inference in private cloud environments, citing stronger security and more predictable performance. Meanwhile, 66% of organizations favor hosting containerized and Kubernetes-based applications either on private cloud or in hybrid setups that combine private and public platforms.
Security and compliance are top concerns fueling the move. A striking 92% of respondents expressed greater trust in private clouds for compliance-heavy workloads, and 66% said they are “very” or “extremely” concerned about compliance risks in public cloud environments. Data privacy concerns also stand out as the primary obstacle to adopting generative AI, with 49% of respondents flagging it as a critical issue.
Financial predictability emerged as another key driver. While the public cloud is often seen as agile and scalable, 94% of IT leaders surveyed acknowledged wasting money on unused or underutilized public cloud services. Nearly half said they waste over 25% of their public cloud spending – pointing to a strong case for greater visibility and cost control through private cloud deployments.
Key Challenges: Skill Gaps and Siloed IT Teams
Despite growing momentum, two critical challenges remain: a shortage of in-house skills and siloed IT team structures. Thirty-three percent of respondents cited fragmented IT teams as a significant barrier to private cloud adoption, while 30% pointed to a lack of internal expertise. However, the report also notes a trend toward platform-based team structures. Some 81% of technically mature organizations now organize IT around centralized platform teams, rather than functionally siloed departments – an approach that may help close the skill gap and reduce reliance on external services.
The report ultimately suggests that the so-called “cloud reset” is no longer theoretical. It is a reality playing out across industries, from financial services to healthcare, as CIOs and IT leaders recalibrate their cloud strategies. With support for high-performance applications, compliance-driven workloads, and AI development, private cloud infrastructure is now seen as a strategic equal – if not a preferred choice – for enterprise-scale digital transformation.
The Private Cloud Outlook 2025 study was conducted between March 6 and April 4, 2025. Participants represented a mix of small, mid-size, and large organizations from sectors including government, healthcare, insurance, and pharmaceuticals. The study used definitions consistent with NIST and Broadcom, distinguishing private cloud as dedicated infrastructure controlled by a single organization, whether on-premise or through a third-party provider. Public cloud, by contrast, referred to shared infrastructure offered by third-party vendors, excluding software-as-a-service platforms.
