We have investigated the solvation structure for cyclooctylpyranone (COP) in water solvent using force-field molecular dynamics (MD) and Car-Parrinello mixed quantum mechanics-molecular mechanics (CPMD) calculations. The MD calculations show that in water solvent COP can exist in two conformational states which differ with respect to the relative orientations of the three rings, namely phenyl, pyranone and cyclooctane. We report the existence of strong orientational preference for the water molecule in the first solvation shell and the orientational preference disappears for solvent molecules beyond the first solvation shell. In order to investigate the confinement effect on the structure, dynamics, charge distribution and dipole moment of COP, we have carried out MD and CPMD calculations for COP within HIV type-1 protease (PR). Interestingly, we do not see any conformational transitions for COP within the protein cavity and it remains as a single conformer. We do see a remarkable effect of confinement on few other torsional degrees of freedom such as gg to tg conformational shift for the propyl group of COP. However, the methyl group rotational dynamics remains similar in the water solvent and in the protein environment. Also, within the protein cavity, the COP molecule is more polarized when compared to water solvent. Static ab initio electronic structure calculations were performed on the COP molecule with varying torsional angle in order to investigate the angle dependence of the molecular volume and energy.