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What is Cloud Computing?

Updated: Mar 13, 2023

Cloud computing refers to any kind of hosted service delivered over the internet. These services often include servers, databases, software, networks, analytics and other computing functions that can be operated through the cloud.

Files and programs stored in the cloud can be accessed anywhere by users on the service, eliminating the need to always be near physical hardware. In the past, for example, user-created documents and spreadsheets had to be saved to a physical hard drive, USB drive or disk. Without some kind of hardware component, the files were completely inaccessible outside the computer they originated on. Thanks to the cloud, few people worry anymore about fried hard drives or lost or corrupted USB drives. Cloud computing makes the documents available everywhere because the data actually lives on a network of hosted servers that transmit data over the internet. 



Cloud companies, sometimes referred to as Cloud Service Providers (CSPs), are companies that offer services or applications on the cloud. These cloud companies essentially host tools and data centers that allow customers to retrieve and utilize information in a flexible, manageable and cost-effective manner. Through cloud companies, customers can easily access their cloud-based data via any network connection.


Cloud Computing Service Types

Cloud computing services are broken down into three major categories: software-as-a-service (SaaS), platform-as-a-service (PaaS) and infrastructure-as-a-service (IaaS).

Software-as-a-Service SaaS is the most common cloud service type. Many of us use it on a daily basis. The SaaS model makes software accessible through an app or web browser. Some SaaS programs are free, but many require a monthly or annual subscription to maintain the service. Requiring no hardware installation or management, SaaS solutions are a big hit in the business world. Notable examples include Salesforce, Dropbox or Google Docs.

Platform-as-a-Service PaaS is a cloud environment supporting web application development and deployment. PaaS supports the full lifecycle of applications, helping users build, test, deploy, manage and update all in one place. The service also includes development tools, middleware and business intelligence solutions. Notable examples include Windows Azure, AWS Elastic Beanstalk and Google App Engine.

Infrastructure-as-a-Service IaaS provides users with basic computer infrastructure capabilities like data storage, servers and hardware — all in the cloud. IaaS gives businesses access to large platforms and applications without the need for large onsite physical infrastructures. Notable examples of IaaS include DigitalOcean, Amazon EC2 and Google Compute Engine.

How Does Cloud Computing Work?

The cloud is basically a decentralized place to share information through satellite networks. Every cloud application has a host, and the hosting company is responsible for maintaining the massive data centers that provide the security, storage capacity and computing power needed to maintain all of the information users send to the cloud. 

The most prominent companies hosting the cloud are major players like Amazon (Amazon Web Services), Microsoft (Azure), Apple (iCloud) and Google (Google Drive), but there's also a plethora of other players, large and small. These hosting companies can sell the rights to use their clouds and store data on their networks, while also offering the end user an ecosystem that can communicate between devices and programs (e.g., download a song on your laptop and it's instantly synced to the iTunes software on your iPhone).

Generally, cloud computing follows three delivery models: 

Public This is the most common and all of the players mentioned above (Amazon, Microsoft, Apple & Google) run public clouds accessible anywhere with login credentials and the right web app. 

Private This model offers the same kind of flexibility as the public cloud, but with the infrastructure needs (hosting, data storage, IT staff, etc.) provided by the companies or users of the service. Additionally, the restricted access and hands-on management of hosting gives the private model an extra layer of security. 

Hybrid Hybrid cloud computing is a combination of the public and private models. The two cloud types are linked over the internet and can share resources when needed (e.g., if the private cloud reaches storage capacity or becomes corrupted, the public cloud can step in and save the day).

Uses of Cloud Computing


Companies and individuals use cloud computing in a variety. In addition to some of the examples already covered, here is a quick look at some other important application areas. 

Communication & Collaboration The entire Google suite of applications is cloud-based, from calendar to Gchat. Additionally, so are popular apps like Skype and WhatsApp, and all empower people to communicate and collaborate on a global scale. Entertainment A combination of cloud computing and vastly improved internet speed has given rise to media streaming giants like Netflix and Hulu, which host enormous databases of movies and TV shows available via the cloud. The cloud allows these companies and others like Spotify and Tidal, to exist. Big Data Analytics Before the cloud, using big data to glean patterns and insights was a cumbersome and expensive process. The cloud has changed all that, eliminating the need for in-house development resources when compiling and analyzing data. Nowadays companies can collect data from a variety of sources, connect them to the cloud and dig for insights in real time.

Business Processes Without the cloud, innovative tools like Salesforce, Slack and myriad others designed to enhance and streamline the daily operations of companies would not exist.  Backups Cloud computing is an important answer to the issue of data loss and recovery on physical hard drives. Most individuals who’ve owned a computer have experienced the stress of losing irreplaceable files. Whether it’s a term paper, family photos or the company payroll, cloud computing offers an easily accessible backup solution to keep data safe.

Advantages of Cloud Computing:

  1. In cloud computing, resources are easily scaled up or down based on demand. This allows organizations to avoid the costs and complexity of maintaining their own hardware, and instead pay for only the resources they need when they need them.

  2. Cloud computing supports remote workers and provides access to resources for users in different locations.

  3. Cloud computing is more cost-effective than IT infrastructure since organizations only pay for the resources they need when they need them. This eliminates the need to invest in costly hardware and software that may not be fully utilized.

  4. Offer high availability and reliability through the use of redundant infrastructure and automated failover mechanisms. This ensures that services are always available to users and that data is protected against loss.

  5. Cloud computing allows organizations to quickly deploy applications and services, without the need for complex hardware and software installations.

Disadvantages of Cloud Computing:

  1. Cloud computing raises security concerns when sensitive data is stored in the cloud. Organizations must take measures to ensure that data is protected against unauthorized access and breaches.

  2. Cloud computing is dependent on internet connectivity, and service interruptions can cause disruptions in business operations.

  3. When using cloud computing services, organizations may have limited control over the infrastructure and services provided by the cloud provider. This can make it difficult to meet specific business requirements.

  4. It is difficult for the organization to switch cloud computing providers or migrate to a different infrastructure.

  5. Cloud computing providers may have SLA limitations that can affect the availability and performance of services. Organizations must carefully review SLAs and negotiate terms to ensure that they meet specific business requirements.


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