What is cloud computing?

A beginner’s guide

Simply put, cloud computing is the delivery of computing services – servers, storage, databases, networking, software, analytics and more – over the Internet (“the cloud”). Companies offering these computing services are called cloud providers and typically charge for cloud computing services based on usage, similar to how you’re billed for gas or electricity at home.

Still unclear on how cloud computing works and what it’s for? This beginner’s guide is designed to demystify basic cloud computing jargon and concepts, and quickly bring you up to speed.

How to choose a cloud provider

Browse a dictionary of common cloud computing terms

Uses of cloud computing

You’re probably using cloud computing right now, even if you don’t realise it. If you use an online service to send emails, edit documents, watch films or TV, listen to music, play games, or store pictures and other files, it’s likely that cloud computing is making it all possible behind the scenes. The first cloud computing services are barely a decade old, but already a variety of organisations – from tiny start-ups to global corporations, from government agencies to non-profits – are embracing the technology for all sorts of reasons. Here are a few of the things you can do with the cloud:

  • Create new apps and services
  • Store, back up and recover data
  • Host websites and blogs
  • Stream audio and video
  • Deliver software on demand
  • Analyse data for patterns and make predictions

Top benefits of cloud computing

Cloud computing is a big shift from the traditional way businesses think about IT resources. What is it about cloud computing? Why is cloud computing so popular? Here are 6 common reasons why organisations are turning to cloud computing services:

1. Cost

Cloud computing eliminates the capital expense of buying hardware and software, and setting up and running on-site data centres – the racks of servers, the round-the-clock electricity for power and cooling, the IT experts for managing the infrastructure. It adds up quickly.

2. Speed

Most cloud computing services are provided as self service and on demand, so even vast amounts of computing resources can be provisioned in minutes, typically with just a few mouse clicks, giving businesses a lot of flexibility and taking the pressure off capacity planning.

3. Global scale

The benefits of cloud computing services include the ability to scale elastically. In cloud speak, that means delivering the right amount of IT resources – for example, more or less computing power, storage, bandwidth – exactly when it’s needed, and from the right geographic location.

4. Productivity

On-site data centres typically require a lot of “racking and stacking” – hardware setup, software patching and other time-consuming IT management chores. Cloud computing removes the need for many of these tasks, so IT teams can spend time on achieving more important business goals.

5. Performance

The biggest cloud computing services run on a worldwide network of secure data centres, which are regularly upgraded to the latest generation of fast and efficient computing hardware. This offers several benefits over a single corporate data centre, including reduced network latency for applications and greater economies of scale.

6. Reliability

Cloud computing makes data backup, disaster recovery and business continuity easier and less expensive, because data can be mirrored at multiple redundant sites on the cloud provider’s network.

Types of cloud services: IaaS, PaaS, SaaS

Most cloud computing services fall into three broad categories: infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS). 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 accomplishing your business goals easier.

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. To learn more, see What is IaaS?

Platform as a service (PaaS)

Platform as a service (PaaS) 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. To learn more, see What is PaaS?

Software as a service (SaaS)

Software as a service (SaaS) 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, such as software upgrades and security patching. Users connect to the application over the Internet, usually with a web browser on their phone, tablet or PC. To learn more, see What is SaaS?

Types of cloud deployments: public, private, hybrid

Not all clouds are the same. There are three different ways to deploy cloud computing resources: public cloud, private cloud and hybrid cloud.

Public cloud

Public clouds are owned and operated by a third-party cloud service provider, which delivers computing resources such as servers and storage over the Internet. Microsoft Azure is an example of a public cloud. With a public cloud, all hardware, software and other supporting infrastructure are owned and managed by the cloud provider. You access these services and manage your account using a web browser.

Private cloud

A private cloud refers to cloud computing resources used exclusively by a single business or organisation. A private cloud can be physically located on the company’s on-site data centre. Some companies also pay third-party service providers to host their private cloud. A private cloud is one in which the services and infrastructure are maintained on a private network.

Hybrid cloud

Hybrid clouds combine public and private clouds, bound together by technology that allows data and applications to be shared between them. By allowing data and applications to move between private and public clouds, hybrid cloud gives businesses greater flexibility and more deployment options.

How cloud computing works

Cloud computing services all work a little differently, depending on the provider. But many provide a friendly, browser-based dashboard that makes it easier for IT professionals and developers to order resources and manage their accounts. Some cloud computing services are also designed to work with REST APIs and a command-line interface (CLI), giving developers multiple options.

Microsoft and cloud computing

Microsoft is a leading global provider of cloud computing services for businesses of all sizes. To learn more about our cloud platform, Microsoft Azure, and how it compares to other cloud providers, see What is Azure? and Azure vs AWS.