What is Cloud Computing? [Beginner’s Guide]

What is cloud computing? Cloud computing is a method of delivering computing, storage, and software services over the internet. Common examples of cloud computing services include cloud servers, cloud storage, cloud databases, cloud software, cloud platforms, and networks. Cloud service providers (CSPs) like Amazon’s AWS provide access to over 200 different cloud services.

Not to worry. Understanding the cloud is more simple than you think.

Cloud computing characteristics

There are several characteristics that define cloud computing. They include virtualization, on-demand services, scalability, and a utility pricing model.


A key characteristic of cloud computing is virtualization. What is virtualization? Virtualization can be defined as the process of creating a software-based or virtual representation of something physical. Examples of virtualization include servers, storage, networks, and or applications.

On-demand services

Whether discussing servers or storage, software or networking, cloud computing services are provided on-demand. What does this mean? It means that you can spin up a cloud server, add storage, add software licenses, or turn up networking services within seconds or minutes depending on the services are resources required. This is unlike traditional services where you have to procure a server and set it up manually, buy software and install it, or have a telecommunications carrier or ISP turn up an internet circuit.


One of the most impressive characteristics of cloud computing is scalability. We mentioned above how the cloud is delivered on-demand. That also means that it is highly scalable. You can right-size your cloud services to meet the demands of your customers, users or both.

With cloud servers, you can create auto-scaling groups and policies that allow you to spin up additional computational and storage resources are required. This is extremely helpful for handling fluctuations in resource demand such as traffic spikes.

It also means that you can add software licenses as you hire hew employees. You can remove licenses as needed when your employees do not need or use the software.

Utility pricing model

Have you ever heard of the terms – pay-as-you-go or pay-for-what-you-use? Think of it from the prospective of utility billing – water, natural gas, electricity. You are charged based on consumption of those resources. The cloud pricing model is very similar to this.

With cloud computing, cloud providers typically charge based on the resources you consume. It could be a cloud server that is running for so many hours per day, week, or month. It cloud be the amount of storage you consume for your files, images, and videos. It could be the number of software licenses that you have and the amount of time you have those licenses.

How does cloud computing work?

With cloud computing services such as cloud servers, underlying, physical hardware is controlled by what is known as a hypervisor. A hypervisor is a piece of software that runs on physical hardware. The hypervisor is responsible for subdividing the hardware resources within a server to individual, virtual machines (VMs). Think of a VM as a server within a server that you can allocate to different jobs or tasks. This is relevant for both cloud servers and cloud storage.

In addition to servers and storage, other cloud services are virtualized with software. This includes the delivery of cloud software, known as software as a service (SaaS). The key here is the subscription model or leasing of the software when compared to a purchase. With cloud software, it is all about who has ownership of the software. The delivery of the software is more of a grantor/grantee relationship where as long as you are paying for software licenses, your users have access.

Common examples include Adobe Creative Cloud and Microsoft Office 365. With Microsoft Office, you could purchase Windows 12 outright. However, with Office 365, you always have access to the latest version.

We will get more into cloud IaaS, PaaS and SaaS in the next section.

What are the types of cloud computing?

There are three types of cloud computing. They are Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). We will discuss each type of cloud computing in detail starting with IaaS. We will also briefly touch on what public, private, and hybrid cloud are and how they relate to IaaS.

Infrastructure as a Service (IaaS)

What is Infrastructure as a Service (IaaS)? Cloud IaaS was one of the first cloud services offered. It includes cloud servers, cloud storage (object and block storage), and cloud networking. Think of IaaS as a private, virtualized data center in the cloud. It contains all of the components you need to host your applications, data, and files. It also has the capability to communicate between services and the internet.

Platform as a Service (PaaS)

What is Platform as a Service (PaaS)? Cloud PaaS is similar to IaaS with a few major differences. PaaS was created to help developers build on-demand infrastructure for developing, testing, managing, and delivering software applications to their users and customers.

The key difference between PaaS and IaaS is that the infrastructure layer is taken care of by the cloud provider. Developers do not have to worry about selecting the right cloud server, storage, or network configurations.

Common examples of PaaS include Heroku and Salesforce.com. Developers can code and build right on top of these platforms.

Software as a Service (SaaS)

What is Software as a Service (SaaS)? We touched on SaaS a little bit in the previous section. Cloud SaaS is simply a delivery model for providing software to customers on a subscription basis. Like other cloud services, SaaS provides on-demand and utility-based pricing.

Unlike traditional software, SaaS providers manage and host the software applications. They handle the security patches, updates and upgrades. This allows customers to use the software without worrying about managing it.

Cloud SaaS applications are accessed through the internet browser or downloaded as an app to your mobile device or desktop.

What are the types of Cloud IaaS?

We have discussed cloud computing types – IaaS, SaaS, and PaaS. Now, it is time to go over the different types of cloud IaaS. They include public cloud, private cloud, and hybrid cloud.

Public Cloud

The public cloud IaaS market is the largest. It is also the oldest cloud service. Public cloud can be defined as a multi-tenant cloud with subdivided computational and storage resources for one or more customers. The key thing to remember here is multi-tenant, one or more customers which means a shared environment.

There are many opinions on the security of public cloud since it is a shared environment. However, most cloud providers have hardened their public cloud infrastructure with security policies and management to the point where they are now very secure.

Public cloud is much more cost-efficient than a private cloud. This is because of the shared resource and economies of scale. With public cloud, you also pay for what you use, it is on-demand and highly scalable.

Private Cloud

What is private cloud? When you hear the term private cloud, I want you to think of dedicated resources. With private cloud environments, you share resources with a limited number of customers or no customers at all. The infrastructure and services are maintained on a private network.

There are two options for building private clouds. Build it yourself or purchase private cloud infrastructure from a cloud provider. You can build your private cloud by buying your own severs, storage devices, networking hardware, and hypervisor. You can set this up in a colocation data center.

As an alternative, you can purchase private cloud infrastructure from cloud providers like AWS, Microsoft, Google Cloud, and others. In this case, it is much more secure than public cloud and offers greater performance. The downside to private cloud is that it is much more expensive than public cloud. There may also be a longer commitment for leasing these resources.

Private cloud is required in certain industries due to regulatory compliance. The best example is the healthcare industry and HIPAA-HITRUST. It can also be a requirement by software companies for licensing their product. They may require dedicated, single-tenant infrastructure for their software license.

Hybrid Cloud

What is hybrid cloud? Hybrid cloud is really an architecture type rather than a specific service. Hybrid cloud involves the combining of public and private cloud infrastructure. There are many benefits associated with hybrid cloud architecture such as greater flexibility, cost-savings, and security for mission-critical code and data.

Cost optimization is a big deal these days as businesses and individuals can find themselves spending a lot more than anticipated on the cloud. With a hybrid cloud, you can run front-end code in the public cloud, backed cloud in private cloud, and store data in both public and private clouds based on whether or not it has sensitive or proprietary data.

Benefits of cloud computing?

I feel like we have touched on a lot of the benefits of cloud computing without even trying. In this section, we will look at defining those benefits.

Faster procurement times

Businesses are innovating at a faster pace than ever before. This is due in part to advancements in technologies like cloud computing.

Cloud computing allows companies and individuals to procure servers and storage for their ideas without having to purchase hardware, setup and install it. The speed at which we can deploy code and applications, store and access data is amazingly fast.

Where it use to take two weeks for IT to purchase and setup a server, a developer can spin up a server in under a few minutes. This allows developers and companies to test new ideas without large investments in time and money. You no longer have to worry about failing.

Increased productivity

With cloud computing, your business is able to focus on what it does best rather than worrying about managing infrastructure, deploying code, installing and supporting software. The result is increased productivity and innovation.

Greater reliability

With cloud computing, you have built in redundancy and reliability. The cloud makes it surprisingly easy to create backups of data, applications, servers and more. With cloud IaaS, your applications run on one or more VMs and snapshots are taken and stored in cloud storage for access later on.

The cloud is key to data backup and storage, disaster recovery, and business continuity. With cloud computing, you can have your data and applications replicated across multiple regions and availability zones (AZs). By the way, an availability zone is the term for a cloud data center.

Increased cost-savings

Some argue that the cloud is more expensive than colocation, dedicated servers, or buying software outright. In some cases, this is true. However, the cloud is also offers significant savings on both capital expenses (CapEx) and operating expenses (OpEx).

With the cloud, you do not have to worry about the upfront, initial investment into hardware or software. It is spread out over time.

In addition, you don’t have to worry about the resources required to maintain your hardware or software when you use cloud computing. This includes costs such as staff to maintain data center infrastructure, electricity costs, cooling costs, hardware replacement costs, and software replacement costs when new versions become available.

Global scale

The cloud is everywhere. With cloud computing, you have access to a large global footprint of data centers and network infrastructure. You can expand into new markets with the click of a button to be closer to your customers. You can open a new office and immediately purchase software licenses for your employees. You can build applications on any browser with PaaS.

Superior performance

The best cloud computing services use a global network of dependable datacenters. These servers are upgraded regularly for efficient and fast computing to the latest generation hardware. This offers huge economies of scale, performance, and reduced network latency over a single datacenter.

Enhanced security

Many argue that the cloud is not secure. That it is not as secure as colocation or managing your own infrastructure. The truth is that security starts with the organization and its security policies, controls, education, and training.

Cloud providers that offer cloud computing services, whether IaaS, PaaS, or SaaS, take cybersecurity extremely serious. They have spent countless resources creating security best-practices, templates, controls and checks, and monitoring software to detect anomalies, security threats and vulnerabilities.

A general role when it comes to cloud computing is that the provider is responsible for the security of the cloud while the customer is responsible for security in the cloud.


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