The majority of private cloud conversations revolve around infrastructure as a service (IaaS). IaaS is a more natural progression from the consolidation and virtualization efforts going on in most data centers today. By adding automation, orchestration and provisioning portals, IT can gain efficiency and possibly lower costs over the virtualized data center. That being said, IaaS is not necessarily the right end goal because it still relies on the siloed application, operating system, server (virtual or physical) model.
A great end goal for the cloud model is PaaS. PaaS, or platform as a service, breaks the 1-to-1 relationship between OS and application/service, and provides for more fluid scalability. Additionally, PaaS platforms can remove the requirement for custom OS and server builds on a per-service basis, further reducing administrative overhead.
…An interesting example of private PaaS is Apprenda. Apprenda focuses on .Net and SQL Microsoft environments for its solution. In very basic terms, you provide its software with Microsoft Server and SQL Server instances, and it builds a fluid cloud development platform from them. Existing applications can be migrated into the PaaS cloud while new applications are being written directly to the platform. The entire system is agnostic to the infrastructure beneath; it only cares about the OS instances presented.