What is Cloud Computing?

Cloud Computing Symbol (CeBIT 2013)
Cloud Computing Symbol (CeBIT 2013). Sean Gallup / Getty Images

Definition: Cloud computing consists of hardware and software resources made available on the Internet as managed third-party services. These services rely on advanced software applications and high-end networks of server computers.

Types of Cloud Computing

Service providers create cloud computing systems to serve common business or research needs. Examples of cloud computing services include:

  1. virtual IT (Information Technology): Configure and utilize remote, third-party servers as extensions to a company's local IT network
  1. software: Utilize commercial software applications, or develop and remotely host custom built applications
  2. network storage: Back up or archive data across the Internet to a provider without needing to know the physical location of storage

Cloud computing systems all generally are designed to support large numbers of customers and surges in demand.

Examples of Cloud Computing Services

These examples illustrate the different types of cloud computing services available today:

Some providers offer cloud computing services for free while others require a paid subscription.

How Cloud Computing Works

A cloud computing system keeps its critical data on Internet servers rather than distributing copies of data files to individual client devices. Video-sharing cloud services like Netflix, for example, stream data across the Internet to a player application on the viewing device rather than sending customers DVD or BluRay physical discs.

Clients must be connected to the Internet in order to use cloud services. Some video games on the Xbox Live service, for example, can only be obtained online (not on physical disc) while some others also cannot be played without being connected.

Some industry observers expect cloud computing to keep increasing in popularity in coming years.

The Chromebook is one example of how all personal computers might evolve in the future under this trend - devices with minimal local storage space and few local applications beside the Web browser (through which online applications and services are reached).

Cloud Computing Pros and Cons

Service providers are responsible for installing and maintaining core technology within the cloud. Some business customers prefer this model because it limits their own burden of having to maintain infrastructure. Conversely, these customers give up management control over the system, relying on the provider to deliver on the needed reliability and performance levels..

Likewise, home users become highly dependent on their Internet provider in the cloud computing model: Temporary outages and slower-speed broadband that are a minor nuisance today can become a critical issue in a fully cloud-based world. On the other hand - proponents of cloud technology argue - such an evolution would likely drive Internet providers to keep improving the quality of their service to stay competitive.

Cloud computing systems are normally designed to closely track all system resources. This in turn enables providers to charge customers fees proportional to their network, storage and processing utilization.

Some customers prefer this metered billing approach to save money, while others will prefer a flat-rate subscription to ensure predictable monthly or yearly costs.

Using a cloud computing environment generally requires you to send data over the Internet and store it on a third-party system. The privacy and security risks associated with this model must be weighed against the benefits versus alternatives.