What is cloud computing? All you need to know about cloud computing

Updated: A brief introduction to cloud computing, starting with the basics and moving on to PaaS and IaaS, hybrid cloud, AWS, Azure, and public cloud.

Cloud computing is one of the best options

In simple terms, what is cloud computing?

Cloud computing refers to the provision of computing services on-demand, including applications, storage, and processing power. This is typically done over the internet and on an as-you-go basis.

What is cloud computing?

Instead of owning their computing infrastructure, data centers or storage facilities, companies can rent access from a cloud service provider to any application and storage.

Cloud computing services offer a way for firms to avoid the initial cost and complexity associated with maintaining and operating their IT infrastructure. Instead, they can simply pay for what they need, when and where they need it.

Providers of cloud computing services, on the other hand, can enjoy significant economies of scale by providing the same services to many customers.

What cloud computing services do you offer?

Cloud computing services offer a wide range of services, including storage, networking, processing power, and natural language processing. Almost any service that does not require you to be physically near the computer hardware can be delivered through the cloud.

What are some examples of cloud computing?

Many services are powered by cloud computing. This includes services for consumers like Gmail and the cloud backup of your photos from your smartphone. However, large companies can also use cloud computing services to store all their data and run their applications in the cloud. Netflix uses cloud computing services for its video streaming service, as well as its business systems. There are also a few other organizations that use these services.

Cloud computing is now the default choice for many apps. Software vendors are offering their software as services over the Internet rather than as standalone products, as they attempt to move to a subscription model. Cloud computing can have some downsides. It can introduce new risks and costs to companies that use it.

It is called cloud computing.

Cloud computing is based on the principle that the location and details of the service (such as its hardware or operating system) are irrelevant to the user. This is why the cloud metaphor was borrowed from old telecoms network schematics. In which the public telephone network, and later the internet, was often depicted as a cloud to indicate that it didn’t matter. It was simply a collection of stuff. Although this is a simplified explanation, many customers still find it crucial to have their data and services located.

What’s the history of cloud computing technology?

Although cloud computing is a term that has been used since the 2000s, the concept of computing–as-a–service dates back to the 1960s when companies could rent time on mainframes rather than having to purchase one.

These “time-sharing” services were mostly overtaken by PCs, which made it more affordable to own a computer. Then came the rise in corporate data centers, where large amounts of data could be stored by companies.

The idea of renting computing power has been reintroduced in the form of utility computing, application service providers, grid computing and grid computing. This was in the late 1990s and early2000s. Cloud computing followed, with the emergence and use of software-as-a-service and hyperscale cloud computing providers like Amazon Web Services.

What is the importance of the cloud?

According to IDC research, cloud computing infrastructure now accounts for more that a third of all IT expenditure worldwide. As computing workloads shift to the cloud, spending on traditional IT in-house continues to decline.

According to 451 Research, around a third of enterprises’ IT spending will go on cloud and hosting services in the coming year. This “indicates a growing dependence on external sources for infrastructure, management, and security services.” Gartner analyst predicts that by 2021, half of all global enterprises will be using the cloud.

Gartner predicts that global cloud services spending will rise to $260bn in 2019, up from $219.6bn last year. The analysts also expect it to grow at a faster pace. It’s unclear how much of this demand comes from businesses who want to migrate to the cloud, and how much is being created from vendors who only offer cloud versions (often because they want to shift from selling one-off licenses to more lucrative and predictable subscriptions).


From 451 Research, Predictions of cloud computing revenues up to 2021

Image: 451 Research

What is Infrastructure as a Service?

There are three types of cloud computing. Infrastructure-as a Service (IaaS), refers to the basic building blocks of computing that are available for rent: storage, networking, and virtual servers. This is a great option for companies who want to create applications from scratch and manage almost all elements of the infrastructure. However, it requires firms to have the technical skills necessary to organize services at this level. Oracle research found that online infrastructure made it easier for IaaS users to innovate, cut down on time and significantly reduced ongoing maintenance costs. Half of respondents said IaaS wasn’t secure enough to protect most important data.

What is Platform as a Service?

Platform-as a Service (PaaS), is the next layer. This will include the underlying storage, networking and virtual servers. It will also include the tools, software and tools that developers need to create applications on top. These could include middleware and database management. Operating systems and development tools.

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What is Software as a Service?

Software-as a Service (SaaS), is the delivery and use of software-as a service. This is probably the most common version of cloud computing. End users don’t need to know about the operating system and hardware behind the service. They can access it via an app or web browser. Often, the price is per seat or per user.

Researchers at IDC claim that SaaS will continue to be the dominant cloud computing model. It accounted for nearly two-thirds (or more) of all public cloud spending in 2017. This figure will drop to under 60% by 2021, according to IDC. SaaS spending consists of both applications and system infrastructure software. IDC predicts that applications purchases will dominate spending, accounting for more than half the public cloud spending in 2019. More than 60% of cloud application spending will be accounted for by customer relationship management (CRM), and enterprise resource management applications (ERM). There are many applications that can be delivered through SaaS, including CRM like Salesforce and Microsoft’s Office 365.

Cloud computing: Benefits

Although the exact benefits of each cloud service will vary, companies don’t have to purchase or maintain their own computing infrastructure.

It is no longer necessary to buy servers or update operating systems or applications, nor decommission or dispose of outdated hardware or software. This is all done by the supplier. It can be a good idea to use a cloud provider for commodity applications such as email. Cloud services can be more cost-effective and secure for small businesses than small ones. A company that is skilled in managing and protecting these services will likely have more experience and better skills than a smaller business.

Cloud services allow companies to move more quickly on projects and test new concepts without having to pay upfront large amounts. This is because they only pay for what they use. Cloud advocates often refer to this concept as “business agility” because it is a major benefit. It is possible to quickly start new applications by leveraging the cloud’s ability to create new services in a fraction of the time it takes to procure traditional IT services. The cloud’s elastic nature makes it easier to scale up new applications quickly, even if they become extremely popular.

A company that uses an application frequently, such as for email or CRM, may find it more economical to host it in the cloud than having dedicated hardware and software lying idle. Cloud hosting for applications like CRM or email could reduce the IT staff’s workload. If such applications do not generate competitive advantage, it will have little impact. Some companies may find it useful to shift spending from capex into opex when they move to a service model.

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Cloud computing benefits and disadvantages

Cloud computing does not necessarily cost less than other types of computing. Renting is also not always more affordable than purchasing long-term. It may be cheaper to provide the service in-house if an application has a predictable need for computing services.

Some companies might be reluctant to store sensitive data in a service that is used by other competitors. If you move to SaaS, it may mean that your company is using the same applications as another competitor. This could make it difficult to gain any competitive advantage if this application is critical to your business.

Although it is easy to use a cloud application, migrating data and apps to the cloud can be more difficult and costly. It seems that there is a shortage of cloud skills, with DevOps specialists and multi-cloud management knowledge in particular short supply.

A recent survey found that a large proportion of cloud users believe upfront migration costs outweigh long-term savings from IaaS.

You can access your applications only if you have internet access.

How does cloud computing adoption impact IT budgets?

Cloud computing can shift spending away from capital expenditure (CapEx), to operating expenditures (OpEx), as companies purchase computing as a service, rather than as physical servers. This could allow companies to avoid huge increases in IT spending that would normally be associated with new projects. Using the cloud to make space in the budget might be easier than going directly to the CFO to request more money.

According to ZDNet’s survey on IT budget predictions, “CIOs are turning increasingly to cloud infrastructure and services to increase flexibility and relieve capital budget pressures.” This doesn’t necessarily mean that cloud computing will always be or necessarily cost less than keeping your applications in house. However, applications that have a predictable and steady demand for computing power may find it cheaper to keep them in-house (at least from a processing power perspective).

Cloud computing spending is increasing faster than anticipated

How can you make a case for cloud computing in your business?

Before you can make a business case to move systems to the cloud, it is important to know how much your current infrastructure costs. There are many things to consider, including the obvious costs of maintaining data centers and additional expenses such as leasing lines. The cost of physical hardware, servers, and specifications such as CPUs, cores, RAM and storage. The cost of applications will also be needed to be calculated. Each option has its own cost implications. People costs are often second to infrastructure costs, and more abstract concepts such as the ability to offer new services quicker must be considered in the cloud business case. Cloud business cases should consider the possible downsides. For example, the risk of being tied to one vendor for your technology infrastructure.

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Cloud computing adoption

Although the market is growing quickly, it’s difficult to find figures about how companies are using cloud services. According to one study, around 12% of companies consider themselves cloud-first. Another third of them run workloads in the cloud. A quarter of firms claim they won’t move on-demand.

It is possible that the numbers on cloud adoption depend on who you speak to within an organization. Cloud spending is not all controlled by the CIO. Cloud services are easy to sign up and business managers can use them without having to notify the IT department. While this can help businesses move more quickly, it can also pose security risks if apps are not properly managed.

The adoption rate will vary depending on the application. For example, cloud-based email is easier to adopt than new financial systems. Spiceworks research suggests that companies plan to invest in cloud-based communications, collaboration tools, back-up and disaster restoration, but less in supply chain management.

What about cloud computing security

Although cloud security is a concern for many companies, breaches are very rare. Cloud computing security will depend on the security of your current systems. Systems managed in-house by people who have many other concerns are more likely to leak than those that are monitored by engineers from a cloud provider.

Security is a concern for all companies that move their data between different cloud services. This has led to an increase in cloud security tools. These tools monitor data movement to and from the cloud as well as between cloud platforms. These tools can detect fraudulent use of cloud data, unauthorised downloadings, and malware. These tools have a negative impact on performance and financial returns. They can decrease the return-on-investment of the cloud by 5-10% and affect performance by 5-15%. Some organisations are also concerned about the country of origin for cloud services (see: Is geography irrelevant when referring to cloud computing?). Below are some examples.

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What is a public cloud?

The classic cloud computing model of public cloud allows users to access large amounts of computing power via the internet. This model offers significant advantages, including the ability to quickly scale up a service. Cloud computing suppliers have huge amounts of computing power that they share with a large number customers. This is called the multi-tenant architecture. Because of their large scale, they have sufficient spare capacity to easily handle any customer who requires more resources. This is why they are often used for less sensitive applications that require a different amount of resources.


Image by Gartner

According to IDC, businesses will spend $128 million on public cloud in the coming year.

What is private cloud?

Because it is hidden behind corporate firewalls, private cloud gives organizations the opportunity to reap the benefits of public cloud. However, they don’t have to give up control of data or services. Companies have control over where their data is stored and can create the infrastructure as they wish. This is mainly for IaaS or PaaS projects. Developers can access a pool computing power that can scale on-demand without putting security at threat. This extra security comes at a price, however, because few companies have the same scale as AWS, Microsoft, or Google. They won’t be able create the same economies. Private cloud can still be useful for companies who require extra security. It will allow them to learn cloud services and build internal applications before moving them into public cloud.

What is hybrid cloud?

The hybrid cloud is where most people are in reality. It has a little bit of everything. There are some data in the public cloud and others in the private cloud. This can be used by multiple vendors as well as different cloud levels. TechRepublic research shows that hybrid cloud is preferred for disaster recovery planning as well as the desire to reduce hardware costs by expanding existing data centers.

Infographic: Hybrid cloud is a way for companies to save money

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Migration costs to cloud computing

It is easy to get started for start-ups that plan on running all their systems in the Cloud. It is difficult for most companies to get started. They need to assess their existing data and applications to determine which systems should be left as they are and which ones to move to the cloud infrastructure. Migrating to cloud infrastructure can be costly and risky. Companies could also lose more money if they underestimate the size of these projects.

An analysis of 500 companies that had been early adopters of cloud computing found that the cost of rewriting applications to make them more cloud-friendly was the largest expense, particularly if they were highly customized or complex. One third of the respondents cited high fees to transfer data between systems as a problem in moving mission-critical applications.

Forrester’s report also revealed that skills needed for migration are difficult to find and costly. And that even if organisations do find the right people, they could be taken away by cloud computing companies with deep pockets. A third of respondents said that their software database licensing costs would rise dramatically if they moved apps.

The majority of respondents were also concerned about the performance and reliability of critical apps. One third of respondents cited this reason for not moving critical apps.

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Does cloud computing make geography irrelevant?

It turns out that this is the area where cloud computing really matters. Indeed, geopolitics is causing significant changes in cloud computing users and vendors. First, there’s the problem of latency. If the application comes from a distant data center or another side of a congested network then it may be slower than a local connection. This is the problem with latency.

The second issue is data sovereignty. Many businesses, especially in Europe, have concerns about the storage and processing of their data. European companies worry that their data could be accessed by the US government if it is stored in US data centers or owned by US companies. The big cloud vendors have set up a network of regional data centers so that companies can keep their data within their region.