Cloud computing transforms IT infrastructure into a utility: It lets you ‘plug into’ infrastructure via the internet, and use computing resources without installing and maintaining them on-premises.

What is cloud computing?

Simply put, cloud computing is the delivery of computing services – including servers, storage, databases, networking, software, analytics, and intelligence – over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. You typically pay only for cloud services you use, helping you lower your operating costs, run your infrastructure more efficiently, and scale as your business needs change.

Who uses cloud computing?

The short answer is everyone. From your phone and your car to your smartwatch and your favorite food delivery app, the cloud is everywhere.

But cloud computing is especially powerful for businesses. Because it gives them flexibility and scalability, organizations of every size and in every industry already use cloud computing. Companies use it for routine tasks like data protection, software development, data analytics, disaster recovery, virtual desktops, server virtualization, and customer-facing applications.

cloud computing

Cloud computing benefits

There are several trends pushing business – across all industries – toward the cloud. For most organizations, the current way of doing business might not deliver the agility to grow, or may not provide the platform or flexibility to compete. The explosion of data created by an increasing number of digital businesses is pushing the cost and complexity of data center storage to new levels – demanding new skills and analytics tools from IT.

Modern cloud solutions help companies meet the challenges of the digital age. Instead of managing their IT, organizations can respond quickly to a more fast-paced and complex business landscape. With modern cloud economics, the cloud delivers business value and reduces cost, helping enterprises achieve their full business potential with their cloud spending.

Cloud computing provides a superior alternative to traditional information technology, including these areas:

  • Cost – eliminate capital expenses
  • Speed – instantly provision space for development and testing
  • Global-scale – scale elastically
  • Productivity – increased collaboration, predictable performance, and customer isolation
  • Performance – better price/performance for cloud-native workloads
  • Reliability – fault-tolerant, scalable, distributed systems across all services

Types of cloud services: IaaS, PaaS, serverless, and SaaS

Most cloud computing services fall into four broad categories: infrastructure as a service (IaaS), platform as a service (PaaS), software as a service (SaaS), and serverless. These are sometimes called the cloud computing “stack” because they build on top of one another. Knowing what they are and how they’re different makes it easier to accomplish your business goals.

Infrastructure as a service (IaaS)

The most basic category of cloud computing services. With IaaS, you rent IT infrastructure – servers and virtual machines (VMs), storage, networks, operating systems – from a cloud provider on a pay-as-you-go basis.

Platform as a service (PaaS)

Platform as a service refers to cloud computing services that supply an on-demand environment for developing, testing, delivering and managing software applications. PaaS is designed to make it easier for developers to quickly create web or mobile apps, without worrying about setting up or managing the underlying infrastructure of servers, storage, network, and databases needed for development.

Software as a service (SaaS)

Software as a service is a method for delivering software applications over the Internet, on-demand, and typically on a subscription basis. With SaaS, cloud providers host and manage the software application and underlying infrastructure, and handle any maintenance, like software upgrades and security patching. Users connect to the application over the Internet, usually with a web browser on their phone, tablet, or PC.

Serverless computing

Overlapping with PaaS, serverless computing focuses on building app functionality without spending time continually managing the servers and infrastructure required to do so. The cloud provider handles the setup, capacity planning, and server management for you. Serverless architectures are highly scalable and event-driven, only using resources when a specific function or trigger occurs.

Types of cloud computing

There are three types of clouds: public, private, and hybrid. Each type requires a different level of management from the customer and provides a different level of security.

Public cloud

In a public cloud, the entire computing infrastructure is located on the premises of the cloud provider, and the provider delivers services to the customer over the internet. Customers do not have to maintain their own IT and can quickly add more users or computing power as needed. In this model, multiple tenants share the cloud provider’s IT infrastructure.

Private cloud

A private cloud is used exclusively by one organization. It could be hosted at the organization’s location or the cloud provider’s data center. A private cloud provides the highest level of security and control.

Hybrid cloud

As the name suggests, a hybrid cloud is a combination of both public and private clouds. Generally, hybrid cloud customers host their business-critical applications on their servers for more security and control and store their secondary applications at the cloud provider’s location.

cloud computing

How does cloud computing work?

Cloud computing works by enabling client devices to access data and cloud applications over the internet from remote physical servers, databases, and computers.

An internet network connection links the front end, which includes the accessing client device, browser, network, and cloud software applications, with the back end, which consists of databases, servers, and computers. The back end functions as a repository, storing data that is accessed by the front end.

Communications between the front and back ends are managed by a central server. The central server relies on protocols to facilitate the exchange of data. The central server uses both software and middleware to manage the connectivity between different client devices and cloud servers. Typically, there is a dedicated server for each application or workload.

Cloud computing relies heavily on virtualization and automation technologies. Virtualization enables the easy abstraction and provisioning of services and underlying cloud systems into logical entities that users can request and utilize. Automation and accompanying orchestration capabilities provide users with a high degree of self-service to provision resources, connect services and deploy workloads without direct intervention from the IT staff of the cloud provider.

Cloud security

Traditionally, security concerns have been the primary obstacle for organizations considering cloud services, particularly public cloud services. In response to demand, however, the security offered by cloud service providers is steadily outstripping on-premises security solutions.

According to security software provider McAfee, today, 52% of companies experience better security in the cloud than on-premises (link resides outside IBM). And Gartner has predicted that by this year (2020), infrastructure as a service (IaaS) cloud workloads will experience 60% fewer security incidents than those in traditional data centers (PDF, 2.3 MB) (link resides outside IBM).

Nevertheless, maintaining cloud security demands different procedures and employee skillsets than in legacy IT environments. Some cloud security best practices include the following:

  • Shared responsibility for security: Generally, the cloud provider is responsible for securing cloud infrastructure and the customer is responsible for protecting its data within the cloud – but it’s also important to clearly define data ownership between private and public third parties.
  • Data encryption: Data should be encrypted while at rest, in transit, and use. Customers need to maintain full control over security keys and hardware security modules.
  • User identity and access management: Customer and IT teams need a full understanding of and visibility into network, device, application, and data access.
  • Collaborative management: Proper communication and clear, understandable processes between IT, operations, and security teams will ensure seamless cloud integrations that are secure and sustainable.
  • Security and compliance monitoring: This begins with understanding all regulatory compliance standards applicable to your industry and setting up active monitoring of all connected systems and cloud-based services to maintain visibility of all data exchanges between public, private, and hybrid cloud environments.

cloud computing

The future of cloud computing

Although it’s come a long way already, cloud computing is just getting started. Its future will likely include exponential advances in processing capability, fueled by quantum computing and artificial intelligence, as well as other new technologies to increase cloud adoption.

Here are a few developments that might be coming soon to a cloud-native landscape near you:

  • Large and small businesses will create more hybrid clouds.
  • More enterprises will embrace multi-cloud strategies to combine services from different providers.
  • Low-code and no-code platforms will continue to democratize technology. They will empower citizen developers to create apps that solve problems without help from programmers.
  • Wearable technology and the Internet of Things (IoT) will continue to explode. What started with cloud-connected fitness trackers, thermostats, and security systems will evolve toward next-generation sensors in clothing, homes, and communities.
  • Cloud-native services will integrate with automotive, air, and commercial services to provide a smoother transportation experience for the masses. Self-driving cars and autonomous air taxis will transform commutes with increased comfort, safety, and convenience.
  • Businesses will leverage cloud computing alongside 3D printing to deliver customized goods on demand.

You can’t predict the cloud-native forecast. And yet, you must prepare for it by understanding what is cloud computing, how it works, and how can it benefit your business – today, tomorrow, and for decades to come.