Hybrid Cloud vs Public Cloud: Which Fits Your Business Model

Choosing between public cloud and hybrid cloud is a business decision with direct impact on cost structure, compliance, and agility. Public cloud offers speed, elasticity, and global reach, making it attractive for fast-growing or digital-native businesses. Hybrid cloud, on the other hand, blends control and flexibility, allowing organizations to keep sensitive workloads in-house while scaling others in the cloud.

Both models are expanding quickly. Mordor Intelligence projects the hybrid cloud market to grow from USD 172.77 billion in 2025 to USD 311.75 billion by 2030 at a CAGR of 12.53% . Meanwhile, hyperscalers continue doubling down on public cloud. Oracle, for instance, has announced a USD 6.5 billion investment in a new Malaysian cloud region to improve data residency and latency options.

With both approaches gaining momentum, the challenge for business leaders is clear: which model best fits your workloads, compliance requirements, and long-term goals? The answer starts with understanding the strengths and trade-offs of each.

What is Public Cloud (really)?

Public cloud refers to services delivered over the internet by providers like AWS, Microsoft Azure, or Google Cloud, where infrastructure is shared across multiple customers. The appeal lies in its elastic scalability, pay-as-you-go pricing, and speed of provisioning.

For businesses, the advantages include:

• Rapid scale-up or down based on demand, useful for seasonal traffic or project-based workloads.
• OPEX-driven cost model, avoiding heavy upfront investment in hardware.
• Access to global services, such as AI, data analytics, and managed databases, often beyond the reach of smaller on-prem deployments.

However, public cloud comes with trade-offs. Some of the major ones include:

• Limited control: Businesses share resources and must adapt to provider policies.
• Vendor lock-in risks: Once deeply integrated, moving away from a provider can be complex and costly.
• Data residency and compliance concerns: Depending on regulations, not all workloads can sit in public infrastructure.

In Malaysia, hyperscaler investments like Oracle’s USD 6.5 billion cloud region mean many of these limitations are easing (source). Local presence reduces latency and helps with regulatory alignment, making public cloud more viable than it was a decade ago. But for businesses with sensitive data or strict performance requirements, public cloud may still leave gaps. That’s where hybrid enters the discussion.

What is Hybrid Cloud?

Hybrid cloud is the blend of on-premises or private cloud infrastructure with public cloud resources, integrated to function as one environment. It gives organizations flexibility to keep sensitive or performance-critical workloads under their control, while still leveraging the scalability of public platforms for other applications.

The benefits include:

• Flexibility, as workloads can be placed where they fit best: regulated data on-prem, customer apps in the cloud.
• Cost balancing with steady workloads run on existing infrastructure while bursty demand moves to public cloud, avoiding over-provisioning.
• Control and sovereignty as businesses retain direct oversight of mission-critical systems while enjoying cloud elasticity.

But hybrid cloud is not without challenges:

• Integration complexity: Linking private and public environments requires expertise and careful network design.
• Operational maturity: Monitoring, governance, and security must span both environments.
• Talent requirements: Teams need skills in both traditional IT operations and modern cloud practices.

The growth trajectory of hybrid confirms its rising importance: Mordor Intelligence forecasts the global hybrid cloud market to grow at 12.53% CAGR through 2030 (source). For Malaysian enterprises, this aligns with real-world needs — balancing sovereignty, compliance, and cost-efficiency, while still preparing for digital expansion.

As the debate unfolds, the real question isn’t which model is “better” in general, but which model fits your business model and workloads best. To answer that, we need to consider cost dynamics and workload placement.

How do costs compare over 12 to 36 months?

In our experience, the conversation isn’t simply about public versus hybrid cloud. The real challenge for businesses is how to implement whichever model they choose in a way that is secure, cost-effective, and aligned with their compliance obligations.

Too often, organizations underestimate the complexity of governance, monitoring, and integration. And that’s usually where costs spiral or risks increase.

At Callnet Solution, we focus on building practical frameworks. Think workload classification, zero-trust security, FinOps, network resilience, and so on… so that our clients see measurable value from their cloud investments with minimum unpleasant surprises.

Alan Leong

CallNet Solution Technical Director

Cost is often the deciding factor in cloud strategy, but it’s also the area where misconceptions are common. Many businesses are attracted to public cloud for its pay-as-you-go operating expenses (OPEX) model, which avoids heavy upfront capital expenditure. This works well for short-term projects, development environments, or workloads with unpredictable demand. However, over 12–36 months, costs can become harder to predict. Data egress charges, underutilized resources, and reliance on proprietary services can make bills escalate quickly.

Hybrid cloud introduces a different dynamic. Because some workloads stay on-premises or in a private cloud, organizations can stabilize baseline costs for predictable workloads while leveraging public cloud for bursts or innovation. This reduces over-provisioning but requires careful planning. The trade-off is higher integration and management costs, particularly during the first year of rollout.

From our perspective at Callnet Solution, the smartest approach is to conduct a total cost of ownership (TCO) analysis across 12, 24, and 36 months. This means accounting for not only compute, storage, and network usage, but also hidden elements like licensing, monitoring tools, talent, and compliance audits. Businesses that model TCO realistically tend to avoid the unpleasant surprise of “cloud bill shock.”

Which workloads fit public vs hybrid?

Cost is only part of the equation. The real differentiator lies in how well each model matches specific workloads. Some applications thrive in the elasticity of public cloud, while others require the control and proximity that hybrid cloud provides.

This mapping highlights why many enterprises land on hybrid cloud: it offers flexibility to keep sensitive or latency-dependent workloads close; while still tapping into the scalability of public cloud for everything else.

Decision framework: how should a Malaysian business choose?

After mapping workloads, the next step is to decide which model truly fits your business model in practice. From our experience, the choice is rarely binary. Most businesses land somewhere along a spectrum, blending public and hybrid elements depending on regulatory, financial, and operational priorities.

Below are five dimensions that can guide a well-informed decision.

1. Data criticality & residency

Data residency refers to where information is physically stored and processed. In industries like finance, healthcare, or government-linked sectors, this is not a matter of preference but of regulation. Sensitive datasets may be required to remain within national borders or to be handled under specific security conditions.

This makes residency one of the first filters in any cloud decision. While public cloud providers are making strides, companies must still verify how sector-specific rules apply to their workloads. For some, the presence of a local region may unlock public cloud opportunities; for others, hybrid will remain necessary to maintain compliance.

2. Latency & locality of users

Latency is the time it takes for data to travel between users and applications. For everyday SaaS tools, a few extra milliseconds may not matter. But for real-time analytics, manufacturing shop-floor systems, or point-of-sale (POS) applications, latency can directly affect business performance.

This is where location comes into play. Even with more public cloud regions being launched in Malaysia, hybrid models often prove useful for businesses with distributed operations. For instance, a retail chain with outlets across Johor, Penang, and East Malaysia may find it more effective to keep local systems running close to the point of use, while syncing consolidated data back to the cloud for reporting and business intelligence.

3. Cost predictability & control

Public cloud is often positioned as the “cheaper” option due to its pay-as-you-go model. In the short term, it avoids capital investment in infrastructure and keep your cost low. However, over 12–36 months, businesses may encounter bill shocks from data egress charges, unoptimized usage, or unexpected scaling.

Hybrid cloud offers a way to balance costs by anchoring steady, predictable workloads on existing infrastructure, while using the cloud for spikes or innovation. However, hybrid comes with its own costs: integration tools, connectivity, and governance frameworks must be factored in. This is why we always recommend building a total cost of ownership (TCO) model that looks beyond headline figures to include licensing, monitoring, talent, and compliance. Cost predictability often becomes as important as cost savings.

4. Compliance & auditability

Compliance is not just about where data lives, it’s also about proving to regulators how systems are secured and accessed. Public cloud providers generally meet high certification standards (ISO, SOC, PCI-DSS), which makes them attractive for many workloads. However, auditors often demand a level of visibility that is difficult to achieve when data is fully in the public cloud.

Hybrid environments allow businesses to retain direct oversight of their most sensitive workloads, while still leveraging cloud certifications for less regulated systems. This dual approach provides flexibility: businesses can reassure auditors by keeping control where it’s needed, without losing the benefits of innovation and scale offered by public platforms.

5. Team capability & skills readiness

A public cloud-first approach requires teams skilled in modern cloud-native practices such as Infrastructure-as-Code, automation, and FinOps (cloud cost management). Hybrid cloud adds another layer of complexity: teams must also manage on-prem infrastructure, secure interconnects, and oversee unified monitoring across environments.

For many Malaysian enterprises we’ve worked with, the limiting factor is not technology but people. If the IT team is already stretched thin, hybrid adoption without support can become overwhelming. This is where managed IT partners add value: they bring the expertise, tooling, and governance frameworks needed to operate confidently across hybrid and public environments. Rather than retraining or expanding internal teams, businesses can lean on a partner to bridge capability gaps and accelerate outcomes.

Implementation considerations: practical “how”

Choosing public or hybrid cloud is only half the battle. The real value comes from how you implement the strategy. This is where businesses either unlock long-term efficiency or struggle with hidden costs and risks.

A recent research paper on hybrid cloud security, titled “Hybrid Cloud Security: Balancing Performance, Cost, and Compliance in Multi-Cloud Deployments” by Anjani kumar Polinati, Andhra University India, highlights the challenge clearly: success depends on balancing performance, cost, and compliance across environments through policy-driven frameworks (source).

From our perspective at Callnet Solution, there are five areas that consistently determine whether an implementation delivers on its promise.

1. Policy-based workload placement

Every workload is not created equal. Some datasets require high security and low latency, while others can run comfortably in a global public cloud. Successful organizations begin by classifying workloads into tiers:

• Tier 1 (sensitive): Mission-critical databases, regulated financial or healthcare data.
• Tier 2 (performance-driven): Branch systems, ERP, applications requiring consistent throughput.
• Tier 3 (elastic): Web apps, analytics, seasonal campaigns, or experimental AI projects.

With this classification, IT teams can apply clear placement policies: Tier 1 remains in private or local infrastructure, while Tier 2 and Tier 3 can leverage the elasticity of public cloud. This prevents accidental non-compliance and ensures the business always knows where its data resides.

2. Zero-trust security and encryption everywhere

In hybrid deployments, security cannot stop at the firewall. The principle of zero trust — never assume, always verify — becomes critical. This means:

• Unified identity management across cloud and on-premises, with multi-factor authentication and role-based access.
• End-to-end encryption, ensuring data remains encrypted both at rest and in transit, regardless of environment.
• Micro-segmentation, so a breach in one part of the network does not compromise the entire system.

Our experience shows that security maturity is often uneven: on-prem systems may have strong perimeter controls but weak identity management, while cloud environments may have robust logging but overlooked network paths. Implementing zero-trust across both closes these gaps.

3. Unified observability and FinOps discipline

Hybrid and public cloud environments can quickly become blind spots without consolidated monitoring. IT leaders need a single pane of glass for:

• System health and uptime
• Performance metrics (latency, throughput, error rates)
• Security alerts
• Cost tracking and forecasting

This is where FinOps discipline comes in. Beyond monitoring technical metrics, teams must continuously track and optimize cloud spend, This includes rightsizing workloads, shutting down unused instances, and enforcing budgets. Many of the “bill shock” stories we hear come not from poor architecture, but from a lack of visibility into usage trends.

4. Network design and resilience

In a hybrid setup, the network is the glue. Poor design here can erase all other benefits. A resilient interconnect strategy includes:

• SD-WAN or direct cloud connect, ensuring stable and secure links between sites and providers.
• Route optimization, reducing latency for branch offices or remote workers.
• Failover paths, so a single link failure doesn’t disrupt operations.

We’ve seen organizations underestimate networking in hybrid rollouts, only to face performance complaints or outages that could have been avoided with upfront design. Investing here pays dividends in user satisfaction and system reliability.

5. Change management and automation

As always, technology is only half the picture. People and processes make up the rest. Hybrid environments thrive on automation:

• Infrastructure-as-Code (IaC) for consistent deployment of servers, networks, and policies.
• CI/CD pipelines for applications, ensuring updates reach both on-prem and cloud without drift.
• Automated compliance checks, flagging violations before they become audit failures.

Equally important is training staff and preparing them for new workflows. Without this, hybrid adoption can feel like disruption instead of improvement.

Partner technologies in practice

While no single vendor solves everything, our key partners bring proven value. Microsoft Azure and Arc extend governance and identity management across environments, Nutanix delivers consistency for hybrid operations, and Cisco ensures secure, reliable interconnects. These technologies, combined with Callnet’s managed expertise, allow Malaysian businesses to adopt hybrid or public strategies without overstretching their teams.

What does a phased rollout look like?

Whether you choose public cloud, hybrid, or a mix of both, a phased rollout helps reduce risk and gives your team time to adapt. In our experience, the most effective approach follows four stages:

1. Readiness and TCO modeling Begin with a baseline assessment of workloads, interconnect needs, compliance obligations, and costs. Build a multi-year total cost of ownership model to avoid surprises later.
2. Pilot workloads Move non-critical applications or environments first. For example, development servers or internal collaboration tools. Measure latency, reliability, and cost performance before scaling further.
3. Scale with guardrails Once confidence grows, migrate higher-value workloads. At this stage, apply policies for budgets, auto-scaling, and disaster recovery tests to ensure governance is in place.
4. Steady-state optimization In the long term, cloud strategy becomes less about migration and more about optimization. FinOps reviews, performance tuning, and continuous security audits ensure the environment remains aligned with business needs.

This phased approach reduces disruption and builds organizational confidence. It also creates measurable milestones for leadership teams to track progress.

Conclusion: which fits your business model?

The choice between public cloud and hybrid cloud is about aligning technology with your business model. Public cloud shines when speed, elasticity, and access to global services are the top priorities. Hybrid cloud proves its value when control, compliance, and predictable performance matter most.

At Callnet Solution, we help organizations support, manage, and optimize IT environments with structured onboarding, governance, and security — whether you choose public, hybrid, or a combination of both. Our partnerships with leading providers ensure that your choice is not limited by tools or expertise, but guided by what delivers the best long-term value.

If you’re evaluating cloud strategies, the best place to start is with clarity. Understanding your workloads, compliance obligations, and cost expectations is the first step toward a successful deployment. From there, a managed IT partner can help you implement the right model with confidence.

To learn more, schedule a free consultation with us today or visit our Managed IT Services page.