What is cloud computing, and how does it work?

What exactly is cloud computing?

Cloud computing allows on-demand access to various computing resources via the internet. These resources usually include applications, software, analytics, data storage solutions, and other development and maintenance tools. Cloud architecture enables many organizations to minimize their need for physical IT centers and helps scale businesses faster at lesser cost.

Cloud services are distributed from remote data centers with physical and virtual servers. These data centers can be owned and managed either by individual companies that use the cloud for their own purposes or by cloud service providers (CSP) that open their clouds for the online community, typically for a fee. Businesses and individuals alike can use cloud resources, choosing between providers and the specific features they offer. Cloud computing architecture typically incorporates stringent security and privacy measures to secure all stored information.

Types of cloud computing

Cloud computing can be divided into four distinct types that determine how online resources are hosted and managed in the cloud and how users can take advantage of them. Read on to learn about public, private, and hybrid clouds as well as multi-cloud solutions.

Public cloud

Public clouds are data centers owned and managed by third-party CSPs who deliver on-demand cloud resources to their clients online. While some public cloud services are free of charge, many CPSs offer their assets for a monthly subscription or pay-per-usage fee. The leading providers of public clouds are Google Cloud, Microsoft Azure, Amazon Web Services (AWS), and IBM cloud.

Public cloud infrastructure is an attractive solution for business owners because it offers more flexibility whenever the business needs scaling or downgrading. Companies can start using necessary resources without making large investments into IT infrastructure or, alternatively, stop using cloud services they don’t need anymore at any time.

On the other hand, public cloud users have limited control over the resources that CSPs provide and cannot customize them according to their specific needs. Though public clouds often come with robust security features, they may not meet specific industry standards or security requirements of some companies.

Private cloud

A private cloud is a data center that a single organization owns and uses for its own needs over a private network. Keeping all the computing resources in private cloud storage gives its owner full control of its management and data security.

Private clouds are typically physical data centers located on the organization’s premises. However, it’s not uncommon for companies to use third-party CSP services to facilitate their private cloud online. Because private clouds belong to sole organizations, their owners fully control the cloud’s infrastructure and available resources. It’s a solution preferred by companies that need to follow specific operation and compliance requirements or if they handle sensitive data.

However, to establish a private cloud, the company needs to invest in hardware, software, and future maintenance, which are costly. The scalability of private clouds is also limited to their owners' financial and operational capabilities.

Hybrid cloud

A hybrid cloud combines private and public clouds, allowing organizations to share data and applications in between them. Skillful hybrid cloud management can help companies reach their highest security objectives and scalability goals. It enables them to choose which cloud to operate depending on the workload or changing needs.

Using hybrid cloud storage, organizations can store their sensitive data and maintain essential operations in a more secure private cloud, at the same time using the public cloud for less critical operations and business scaling. Overall, hybrid clouds allow extensive customization and flexibility.

Multi-cloud

Multi-cloud computing means using multiple public clouds from different cloud service providers. It’s a solution that can help organizations avoid vendor lock-in, which occurs when businesses become too dependent on a single cloud service provider and cannot change it without experiencing financial loss or structural damage.

By using multi-cloud storage, organizations can choose the best CSP for specific tasks and get the best out of existing cloud functionalities. Multi-cloud storage also helps to ensure that a failure in one cloud won’t affect operations run in other clouds.

To up their game, some companies also use hybrid multi-clouds, which allow combining multiple public clouds with a company’s own private cloud. This solution helps to keep critical resources in a private cloud while safely scaling the business in several public clouds. However, multi-cloud solutions are suitable mainly for companies with robust management tools, high data transmission rates, and strong security protocols intact.

Cloud computing services

Cloud computing services are different models for how cloud computing can be used in various online environments. Find out about the most popular cloud computing services below.

Infrastructure as a service (IaaS)

IaaS allows businesses to use and keep the necessary IT infrastructure and computing resources in the cloud, either private or public. Whenever the organization rents its IT infrastructure from a public cloud provider, it can scale or decrease resources according to its needs without vast financial investment. That’s because the companies typically pay only for the specific services they use.

IaaS enables organizations to closely monitor and manage their IT infrastructure in the cloud, including capabilities for desktop virtualization, giving them a high level of control over their IT resources. Below are the most common components available on IaaS:

• Data centers
• Operating systems
• Storage
• Networking
• Virtual machines
• Firewalls
• Middleware
• Application programming interfaces (API)

Platform as a service (PaaS)

PaaS is a cloud environment that allows software developers to build, test, and deliver various applications without establishing and managing a specific on-premises platform. Using PaaS, developers can choose from a number of software tools and other IT resources that cloud providers host in their data centers.

By using PaaS to build web and mobile apps, developers can access a comprehensive collection of readily available tools online while saving the time and costs needed to establish the same necessary platforms themselves.

Software as a service (SaaS)

SaaS is a solution for delivering software applications to end users without them needing to install or run software on their devices or data centers. This type of software is fully hosted and managed by cloud service providers, which means they take care of all the necessary security patches, software updates, and occasional maintenance. In exchange, users usually have to pay a monthly subscription for the SaaS. One of the biggest advantages of SaaS is that it stores all the data in the cloud, preventing users from losing it in case their devices crash.

Backend as a service (BaaS)

BaaS is a cloud model created to simplify the development of the web. There’s also a version of this software suited for mobile applications called mobile backend as a service (MBaaS). It offers pre-written backend software so developers can focus on the frontend of the new applications. BaaS removes the hassle of managing and maintaining the backend and can speed up the development process. It also eliminates the cost that would otherwise go toward building the backend.

Serverless computing and function as a service (FaaS)

Serverless computing is a cloud infrastructure that allows developers to write and run their code in the cloud without managing the servers, storing systems, and other underlying infrastructure needed for the code to work. As in previous cases, cloud service providers take care of the necessary computing resources for codes to function. Serverless computing typically works on an event-driven basis, which means that the inserted code triggers specific events needed for that code to function. Depending on the developer’s needs, the supporting infrastructure scales up and down automatically. The users of serverless computing are only charged when the functions are executed and not when they simply run on the server.

Though frequently mistaken for serverless computing, FaaS is actually a subset of serverless computing that enables developers to run small, single-purpose pieces of code called functions. The aim of these functions is to respond to specific events, such as a new data entry or a file upload.

Managed Services

Managed services is the outsourcing of a company’s specific IT tasks and functions to a third-party managed service provider. It’s a hands-off approach that allows businesses to reduce the number of IT operations they have to run in-house and free up internal resources for more business-related activities. This solution is oriented to companies that may lack expertise in managing complex cloud infrastructures or are searching for ways to reduce operational overhead.

Benefits of cloud computing

Cloud computing was created to ease everyday IT operations for both companies and individuals. Find out more about the key benefits of using cloud servers and infrastructure.

Agility and speed

With cloud computing, companies can start using various IT resources the minute they are needed because all of the necessary infrastructure can be found ready-made in the cloud. This inherent feature of a cloud allows companies to fast forward the process of building applications and releasing them to the market and, by doing so, respond to their clients' demands faster.

Elasticity

Cloud architecture enables companies to scale or decrease their resources according to the demand or whenever their financial or structural capabilities change. Without the need to purchase hardware and establish extensive IT infrastructure, businesses can be more flexible in their decision-making and adapt better to the changing market.

Cost savings

By employing cloud infrastructure, businesses don’t need to invest in hardware and software or their development and maintenance. Cloud service users typically pay only for the computing resources they use, which helps to eliminate costs that otherwise may be related to unused data center capacity.

Global reach

Companies can expand their businesses quickly and efficiently by accessing IT resources gathered in the cloud from almost anywhere in the world. Cloud computing allows businesses to try out markets in different regions without needing to establish new IT infrastructure abroad.

Performance

Reputable cloud service providers continuously upgrade their data centers and network systems to provide their clients with the latest-generation software and technological advancements in IT. Cloud users can choose from multiple cloud computing services and pick those that help create the highest-level applications.

Security

Cloud services' security is, in most cases, robust and reliable. Many CSPs employ dedicated security experts to build online defenses around cloud resources and use advanced technology and stringent policies to secure their cloud’s infrastructure. Cloud security is one of the key aspects that many companies consider when choosing a cloud to work in, that’s why CSPs put a lot of effort to offer highest quality security features.

Productivity

Companies using onsite data centers usually use their IT staff to patch hardware and software vulnerabilities or perform other IT management tasks. However, with cloud computing, IT experts can be freed from mundane maintenance tasks and focus more on business objectives, such as expansion, new application development, or process optimization.

Reliability

Cloud architecture allows all the stored data to be simultaneously saved in other online platforms. That means that in case of a service disruption or network crash, all the data in the cloud can be backed up and restored, ensuring business continuity.

Real-world examples of cloud computing in business

Cloud computing is widely used in many industries thanks to the array of benefits it can bring. Take a look at how different businesses use cloud services for their operations:

• Online retailers often turn to IaaS when they need to quickly scale up their server capabilities during peak periods, such as Christmas. Retailers also use PaaS to develop and host their e-commerce applications.
• Media companies, especially those producing video content, use IaaS to quickly scale the necessary infrastructure whenever viewer demand increases. Meanwhile, news media often use PaaS to develop new applications and features for online publications.
• Startups use cloud computing to get the necessary software (SaaS) and infrastructure for application development (PaaS and BaaS). New businesses that cannot allow themselves large investments can fully rely on cloud infrastructure (IaaS) to execute their ideas.
• The gaming industry uses cloud servers to provide users with high speeds and diminish the lag that may occur when physical servers become overloaded.
• Financial institutions apply cloud services to a variety of tasks, from customer relationship management and accounting (SaaS) to storing sensitive data (IaaS). Businesses in finance also rely on the special security services implemented in the cloud to ensure compliance with various financial regulations.
• The healthcare sector often stores vast amounts of patient data in cloud storage to keep it secure and prevent data loss. At the same time, healthcare organizations employ PaaS to create custom healthcare applications.