Remember when "cloud-first" meant public cloud or bust? Well, those days are officially over. Broadcom's inaugural Private Cloud Outlook 2025 report just dropped some serious data that's going to make a lot of IT executives rethink everything they thought they knew about cloud strategy.

Here's the headline that should grab your attention: 53% of organizations now say private cloud is their top priority for deploying new workloads over the next three years. That's not a typo, and it's not some niche finding from a handful of conservative enterprises. This comes from a comprehensive survey of 1,800 senior IT decision-makers across the Americas, Europe, and Asia-Pacific-the kind of global reach that makes these findings impossible to ignore.

What we're witnessing, according to Broadcom's research, is nothing short of a "cloud reset." The old binary thinking of public versus private cloud? Gone. Instead, enterprises are getting smart about workload placement, matching each application to the environment that serves it best.

The Death of Public Cloud First?

Let's start with the most surprising finding: the public cloud first strategy isn't just losing steam-it's practically extinct. As Prashanth Shenoy, VP of Product Marketing for Broadcom's VCF division, put it during a Broadcom briefing: "It's no longer a public cloud first strategy in the industry. Customers and organizations are now having private cloud as the same or better alternative to public cloud."

The numbers back this up in a big way. A whopping 93% of organizations deliberately balance a mix of private and public clouds, and this isn't some accidental evolution. Three-fourths say this hybrid approach is their intentional strategy. When asked about their preferences, only 15% would choose an all-public-cloud model, while just 10% favor private-cloud-only deployments.

But here's where it gets really interesting-and where a lot of conventional wisdom gets turned on its head. We're seeing a massive workload repatriation movement, with 69% of enterprises considering moving workloads from public cloud back to private environments. Even more telling? Thirty-five percent have already done it.

Now, before you assume this is just about dragging old legacy applications back home, think again. The reality is far more nuanced and frankly more impressive. Modern, cloud-native workloads represent 34% of repatriation targets-just as likely to be moved as traditional or back-office applications at 31% each.

"This is pretty insightful because one of the myths out there is like, hey, even if they're repatriating from public to private, these are all the legacy applications," Shenoy explained. "That is not necessarily the case. These are modern workloads, customer-facing and data-intensive workloads that customers and organizations are actively moving to private cloud."

The Triple Threat Driving Private Cloud Adoption

So what's behind this dramatic shift? The research identifies three major forces that are making private cloud the smart choice for more and more workloads.

Security and Compliance: The Trust Factor

Security concerns dominate the conversation, and for good reason. An impressive 92% of organizations trust their private cloud for security and compliance needs. Compare that to public cloud, where 66% of IT leaders are "very" or "extremely" concerned about compliance issues. Security isn't just a nice-to-have anymore-it's the leading driver for workload repatriation from public cloud.

This becomes even more important when you factor in generative AI workloads. Data privacy and security concerns top the list of GenAI adoption challenges at 49%, and organizations are choosing private cloud environments for AI workloads at nearly the same rate as public cloud (55% versus 56%).

Cost Predictability: The Budget Reality Check

Here's where things get uncomfortable for public cloud advocates. The research reveals what Broadcom calls the "Three Cs" plaguing public cloud adoption: Cost, Complexity, and Compliance. The cost numbers are particularly eye-opening.

Ninety-four percent of organizations believe at least some of their public cloud spend is wasted. Let that sink in for a moment. But it gets worse-49% believe more than 25% of their public cloud spending is completely wasted, with 31% thinking that waste exceeds 50%. Only 6% believe they're not wasting any public cloud spend at all.

In contrast, 90% of organizations value private cloud's financial visibility and predictability. When costs are spiraling out of control in public cloud, the appeal of knowing exactly what you're going to pay becomes pretty compelling.

GenAI and Modern Workload Requirements

This might be the biggest surprise in the entire report. We've been conditioned to think that modern, containerized applications and AI workloads naturally belong in public cloud. The data tells a different story.

Eighty-four percent of organizations use private cloud for both traditional and modern applications, completely dispelling the notion that private cloud is just for legacy stuff. When it comes to container and Kubernetes workloads, 66% prefer private cloud or a hybrid approach over public cloud alone.

The GenAI numbers are particularly telling. While 98% of organizations have GenAI plans (with 77% already running pilots or live deployments), they're not automatically defaulting to public cloud for these workloads. Cloud solutions dominate the GenAI lifecycle, but organizations are split almost evenly between public cloud (56%) and private cloud (55%) preferences. Bare metal, despite early industry predictions, comes in at a distant 17%.

Breaking Down the Barriers: IT Silos Are the Real Enemy

Now, before you start planning your private cloud migration, there's a reality check coming. Private cloud adoption faces its own challenges, and the biggest one might surprise you: it's not technology-it's people.

Thirty-three percent of organizations identify siloed IT teams as the greatest challenge to private cloud adoption. This isn't about having specialists in compute, storage, or networking. As one briefing participant noted, it's about "the organizational philosophy, the organizational approach, and frankly, the organizational communications where these teams behave and act like one and focus more at a platform level than only on an individual component level."

The ripple effects of these silos create additional barriers:

• Thirty-one percent face security and compliance challenges
• Thirty percent cite a lack of in-house skills and expertise
• Twenty-nine percent encounter resistance to cloud-based IT models
• Twenty-nine percent deal with vendor platform cloud limitations

Here's the encouraging news: organizations are recognizing this problem and doing something about it. Eighty-one percent are now restructuring their technical organizations around platform teams rather than traditional technology silos.

The skills gap is real, though. More than half (52%) of organizations rely on professional services for specific cloud-related needs, while 28% are heavily dependent on professional services for all aspects of cloud adoption. Interestingly, 56% say they're staffed to run large IT footprints in their own data centers. The challenge isn't headcount-it's evolving existing skills to meet cloud transformation efforts.

GenAI: The Accelerant for Private Cloud Strategy

Let's talk about the elephant in the room-or should I say, the AI in the data center. Generative AI isn't just another workload; it's becoming a major factor in cloud strategy decisions.

The adoption numbers are staggering. Only 2% of organizations report having no plans to adopt GenAI, while the remaining 98% are somewhere on the adoption curve. But here's what's interesting: the top three adoption hurdles are data privacy and security concerns (49%), skill shortages (38%), and integration with existing applications and data (38%).

Notice what's not on that list? Infrastructure limitations. Organizations aren't held back by their private cloud capabilities-they're held back by the same fundamental challenges that make private cloud attractive in the first place: security, skills, and integration.

"Customers are looking towards private cloud as the preferred destination and operating model," Shenoy observed. "When you say container applications and Kubernetes, our mind automatically goes to public cloud, but that is no longer the case."

The Modern Private Cloud: Best of Both Worlds

What's driving this shift toward private cloud isn't nostalgia for the good old days of on-premises infrastructure. Today's private cloud platforms have evolved to support everything from traditional applications to cutting-edge AI workloads. They're no longer playing catch-up to public cloud-they're offering genuine alternatives with distinct advantages.

Ninety percent of IT decision-makers say their ideal setup is a private cloud that delivers the best of both worlds: all the benefits of a cloud operating model with the control, security, and predictability of a dedicated environment.

The key advantages organizations cite include:

• Customization to meet business-specific needs (91%)
• Financial transparency and predictability (90%)
• Flexibility and scalability (89%)

As Richard Munro from Broadcom's VCF Division noted during the briefing, "It was really good to see just how smartly organizations were trying to think about their cloud platforms... This notion that it was the business's fault that they hadn't done the work to get their applications working was completely wrong. These were more likely to be customer-facing, cloud-native applications."

The Cloud Reset Is Here to Stay

What we're seeing isn't a pendulum swing back to private cloud-it's a maturation of cloud strategy. Organizations have moved beyond the public-versus-private debate to focus on what really matters: placing each workload in the environment where it performs best.

The data makes it clear that enterprises have entered a new chapter in cloud adoption, treating private cloud as a strategic option for realizing the full promise of cloud computing. This "cloud reset," as Broadcom calls it, represents an opportunity to create more effective, secure, and cost-efficient IT environments.

"This is a journey, not a sprint," Shenoy concluded during the briefing. "We are pretty excited about the potential and growth opportunities that organizations have to drive their next cloud transformation, especially when it comes to some fundamental shifts in technology like GenAI."

The message is clear: the future of enterprise IT isn't about choosing sides between private and public cloud. It's about being smart enough to use both strategically. And right now, that strategy is pointing more organizations toward private cloud than many of us expected.

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The Private Cloud Outlook 2025 report represents the inaugural study in what Broadcom plans to be an annual series tracking cloud strategy trends. The research was conducted by Illuminas, a Radius Company, between March 6 and April 4, 2025.