A private cloud is a cloud computing environment operated solely for a single organisation. It provides cloud-computing capabilities — on-demand self-service, elastic scaling, resource pooling, measured service — but on infrastructure that is dedicated to and controlled by that organisation, rather than shared with other customers as in a public cloud.
Private cloud vs. on-premise vs. traditional data centre
A traditional data centre is characterised by manual provisioning, siloed infrastructure (dedicated servers per application), and operations-team-mediated resource allocation. Deploying a new server takes days or weeks.
A private cloud replaces this with automated, self-service resource provisioning — a developer can request a new environment through a portal and have it available in minutes, while the underlying infrastructure remains on-premise and under organisational control. The cloud model is the operational and delivery model; the location and ownership are private.
An on-premise deployment describes the physical location and ownership of hardware — it says nothing about the operational model. A private cloud is always on-premise (or in a colocation facility the organisation controls), but not all on-premise infrastructure is private cloud.
The private cloud spectrum
Private cloud exists on a spectrum from simple virtualisation (VMware vSphere — pooled compute, but manual provisioning) to full PaaS (AravaliStack — automated provisioning, Kubernetes orchestration, integrated services, self-service developer portals). The degree to which an on-premise environment provides cloud-like capabilities determines where it sits on this spectrum.