Hyperscalers, legacy infrastructure giants, and cloud-native challengers are colliding as enterprises rebuild private clouds for AI, sovereignty, and cost control.

Hyperscalers Move Into the Data Center

The private cloud market used to belong to traditional infrastructure vendors. In 2025–2026, that story is being rewritten by hyperscalers who now ship their platforms into customer facilities.

AWS Outposts brings fully managed AWS infrastructure, services, APIs, and tools into on-premises locations, effectively turning a customer’s data center into an AWS Availability Zone with local latency and data residency. Amazon Web Services, Inc. Second-generation Outposts racks, announced in late 2025, are expanding into dozens of countries, underscoring Amazon’s push to make local private deployments part of its global footprint. Amazon Web Services, Inc.

Microsoft’s answer is Azure Stack Hub and its evolving Azure Local portfolio, which extend Azure services into on-premises environments with a consistent PaaS and IaaS experience. Microsoft Azure+2Microsoft Learn+2 Organizations can run cloud-native applications in their data centers while still plugging into Azure’s broader ecosystem for AI, analytics, and security.

Google is pursuing a software-first strategy with Google Distributed Cloud, a managed hardware and software stack that deploys Google Cloud services in data centers and edge environments. Software-only editions let enterprises run the platform on their own bare metal, offering Kubernetes-based orchestration with a control plane that aligns with Google Kubernetes Engine. Google Cloud+2Google Cloud Documentation

In all three cases, the hyperscalers are selling more than hardware. They are selling a uniform operating model—identity, APIs, observability, and security policies—that spans public regions, edge sites, and private facilities.

HPE, IBM, Nutanix and the Private Cloud Specialists

While hyperscalers bring massive ecosystems, established enterprise vendors are reshaping themselves as private/hybrid cloud platforms rather than pure hardware providers.

HPE’s GreenLake portfolio positions itself as “cloud services everywhere,” delivering fully managed private cloud and hybrid offerings that can run in customer sites, colocation facilities, or at the edge. Hewlett Packard Enterprise In 2025, HPE refreshed its Private Cloud Business Edition, integrating Morpheus for unified VM and container management and targeting mid-size enterprises and edge deployments. Hewlett Packard Enterprise HPE has also rolled out Private Cloud AI, a turnkey AI “factory” built on GreenLake and NVIDIA platforms, aimed squarely at regulated and sovereign customers that need on-premises AI with strict data controls. Hewlett Packard Enterprise+2Hewlett Packard Enterprise+2

IBM Cloud Satellite provides distributed cloud capabilities that allow IBM Cloud services to run on any infrastructure—on-premises, at the edge, or in other clouds—under a unified control model. IBM+2IBM Cloud This appeals to industries already invested in IBM middleware and mainframe ecosystems that now want consistent cloud services without fully abandoning existing data centers.

Nutanix, long associated with hyperconverged infrastructure, has repositioned itself as a private and hybrid cloud platform. Its documentation emphasizes single-tenant environments, integrated networking and storage, and self-service provisioning wrapped in an automation-heavy control plane designed to mimic public cloud agility on-premises. Hewlett Packard Enterprise

The net effect is a crowded vendor landscape in which customers must navigate overlapping promises of “cloud-like” experiences, each with different design philosophies and ecosystem lock-ins.

Three Competing Private Cloud Philosophies

As private cloud strategies mature, three broad philosophies are emerging.

The first is the “public-cloud-inside” model, exemplified by AWS Outposts, Azure Stack Hub, and Google Distributed Cloud. Here, the private cloud is essentially an extension of the public platform, with near-identical APIs and services but local hardware for latency, residency, or control reasons. CloudOptimo+3Amazon Web Services, Inc.+3Microsoft Azure

The second is the “platform-centric private cloud,” led by players such as HPE, IBM, and Nutanix. In this approach, the vendor’s control plane and infrastructure abstraction layers are the core, and they interoperate with multiple public clouds through connectors, gateways, or overlay management tools. Customers gain flexibility at the cost of aligning more deeply with one primary infrastructure vendor.

The third is the “DIY plus open source” route, where enterprises assemble private clouds using Kubernetes, OpenStack, and a mix of networking, storage, and security components from different providers. This can minimize classical vendor lock-in but demands strong internal engineering capability to architect and operate reliably at scale.

In practice, many large organizations are blending these philosophies—running Outposts in some regions, HPE GreenLake or Nutanix clusters in others, and layering Kubernetes or service meshes across all of them.

Multicloud, Sovereignty, and the Rise of Distributed Clouds

The vendor battle is increasingly shaped by digital sovereignty and multicloud regulations, especially in Europe. AWS has announced a European Sovereign Cloud operated solely by EU personnel, designed to meet stringent data residency and control requirements while still using AWS technologies. Amazon Web Services, Inc. Microsoft has unveiled sovereign solutions for European organizations, promising data hosted under EU law and managed by local staff. The Official Microsoft Blog Google is similarly pitching sovereign cloud and “sovereign AI” solutions with strong administrative controls for government and regulated clients. Google Cloud

Traditional vendors are responding with sovereign-ready private clouds and air-gapped configurations. HPE’s recent announcements highlight secure AI factories and air-gapped management for government and sovereign entities requiring isolated yet cloud-like environments. Hewlett Packard Enterprise VMware and other infrastructure providers argue that true sovereignty goes beyond residency, emphasizing customer control over keys, operations, and legal jurisdiction as critical differentiators. VMware Blogs

For enterprises, this means private clouds are no longer only a technical architecture. They are political and legal instruments in an era where regulators scrutinize concentration risk, cross-border data transfers, and the extraterritorial reach of foreign laws.

How Enterprises Choose Their Private Cloud Partners

Given the crowded field, how are organizations actually deciding?

Surveys and case studies show that existing relationships and skillsets remain powerful determinants; enterprises already heavily invested in AWS or Azure often gravitate toward Outposts or Azure Stack to minimize retraining and tooling changes. Medium+2NetApp Meanwhile, customers wary of hyperscaler lock-in consider HPE GreenLake, IBM, or Nutanix for platforms that promise greater portability and negotiation leverage—especially as some licensing changes and price hikes in virtualization stacks have pushed organizations to diversify. Mordor Intelligence

Industry-specific needs also matter. Financial institutions emphasize regulatory compliance certifications and operational resilience; healthcare looks closely at HIPAA and PHI data localization; manufacturing prioritizes deterministic performance and edge integration. Vendors that can show reference architectures and audited controls for these use cases often win.

Ultimately, most large enterprises are not picking a single winner. Instead, they are building vendor portfolios where private clouds from different providers serve different risk, performance, and sovereignty profiles, stitched together by a unifying governance framework.

Closing Thoughts: No Single Winner, Many Strong Positions

By 2026, there is no single “owner” of private cloud. AWS leads by overall cloud share and hybrid reach. Microsoft capitalizes on its enterprise software footprint. Google leverages Kubernetes and data analytics strengths. HPE, IBM, and Nutanix remain deeply entrenched in data centers, reinventing themselves as cloud platforms in their own right.

For buyers, the takeaway is to focus less on vendor rhetoric and more on practical questions. Which platform best aligns with your regulatory obligations? Which one integrates most naturally with your existing tooling and skills? Where do you need absolute control, and where are you comfortable relying on a hyperscaler’s operational model?

The private cloud battlefield will continue to evolve, but one thing is clear: in an AI-driven, sovereignty-constrained future, this is not a side show to public cloud. It is a central arena where the next decade of enterprise infrastructure strategy will be decided.

References

On-Premises Private Cloud – Amazon Web Services – https://aws.amazon.com/outposts/

Azure Stack Hub – Microsoft Azure – https://azure.microsoft.com/en-us/products/azure-stack/hub

Google Distributed Cloud – Google Cloud – https://cloud.google.com/distributed-cloud

HPE GreenLake Cloud Services – Hewlett Packard Enterprise – https://www.hpe.com/us/en/greenlake.html

IBM Cloud Satellite – IBM – https://www.ibm.com/products/satellite

Author and Co-Editor:
Claire Gauthier, eCommerce Technologies, Montreal, Quebec;
Peter Jonathan Wilcheck, Co-Editor, Miami, Florida.

#PrivateCloud #AWS #Azure #GoogleCloud #HPEGreenLake #IBMCloudSatellite #Nutanix #SovereignCloud #HybridMultiCloud #CloudVendors