What Is Cloud Computing?

Male IT technician carrying cloud in server room, cloud computing
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Cloud computing consists of hardware and software resources made available on the internet as managed external 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:

  • Virtual IT (information technology): Configure and deploy remote external servers as extensions to a company's local IT network.
  • Software: Use commercial software applications, or develop and remotely host custom-built applications,
  • Network storage: 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.

Software-as-a-Service Models

Cloud services using a software-as-a-service model, or SaaS, provide fully functional programs to end users even though the programs may not be resident on their local computers. Email providers like Gmail and Outlook.com are SaaS applications, as well as just about any computer program that runs inside of a browser. As such, SaaS is most familiar to home consumers.

Platform-as-a-Service Models

An SaaS solution sits atop a platform. Vendors that offer platform-as-a-service portfolios generally face corporate clients. PaaS products include virtual servers, operating environments, database environments, and any other "middleware" component that sits between the hardware and the consumer-facing application.

Infrastructure-as-a-Service Models

Platforms, in turn, sit upon infrastructure. Infrastructure-as-a-service solutions generally get to the level of "bare metal"—the physical servers, networking components, and device storage necessary to make platforms (and, hence, services) functional. IaaS is popular with corporate clients, with tradeoffs between speed, cost, and privacy that each vendor balances in different ways.

Examples of Cloud Computing Services

Many different vendors offer various types of cloud-computing services:

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.

Cloud computing visual metaphor
Cloud computing uses devices to access applications that leverage platforms supported by infrastructure.  Sam Johnson

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 besides the web browser (through which online applications and services are reached).

Cloud Computing Pros and Cons

As with any disruptive new technology, cloud computing offers strengths and weaknesses that developers and consumers alike must carefully evaluate.

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 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 become a significant problem 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 usage. Some customers prefer this metered billing approach to saving money, while others 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 vendor-managed system. The privacy and security risks associated with this model must be weighed against the benefits as well as the alternatives.

The Bottom Line for Consumers

The average non-IT consumer benefits from SaaS/PaaS/IaaS technologies because of the lower cost, faster deployment time, and increased flexibility that these solutions offer. Although some people prefer to own the license to a piece of unchanging software, others are content to embrace subscription-based software that requires internet connectivity.