Private cloud is a term that is easily misunderstood. "Private cloud computing is defined by privacy, not location, ownership or management responsibility," Gartner’s Tom Bittman says. A private cloud is dedicated to a single customer, and may reside in customer owned premises, or in the cloud provider’s premises. Operating your IT in a private cloud offers many of the same benefits of public cloud, such as scalability and energy efficiency.
For those having applications that require compliance with HIPAA or PCI DSS, operating a private cloud infrastructure can make a lot of sense.
See the Server Technology Industry Brief “What Type of Datacenter User Are You?” for a further discussion on colocation, public and private clouds.