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What is cloud computing?

A beginner’s guide.

  • 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.

Top benefits of cloud computing

Cloud computing is a big shift from the traditional way businesses think about IT resources. Here are seven common reasons organizations are turning to cloud computing services:


  • Moving to the cloud helps companies optimize IT costs. This is because cloud computing eliminates the capital expense of buying hardware and software and setting up and running onsite datacenters—the racks of servers, the round-the-clock electricity for power and cooling, and the IT experts for managing the infrastructure. It adds up fast.


  • Most cloud computing services are provided 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.

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—right when they’re needed, and from the right geographic location.


  • Onsite datacenters 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.


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


  • 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.


  • Many cloud providers offer a broad set of policies, technologies, and controls that strengthen your security posture overall, helping protect your data, apps, and infrastructure from potential threats.

Types of cloud computing

Not all clouds are the same and no single type of cloud computing is right for everyone. Several different models, types, and services have evolved to help offer the right solution for your needs.


First, you need to determine the type of cloud deployment, or cloud computing architecture, that your cloud services will be implemented on. There are three different ways to deploy cloud services: on a public cloud, private cloud, or hybrid cloud. Learn more about public, private, and hybrid clouds.

Public cloud

Public clouds are owned and operated by third-party cloud service providers, which deliver computing resources like 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 is owned and managed by the cloud provider. You access these services and manage your account using a web browser. 

Private cloud

private cloud refers to cloud computing resources used exclusively by a single business or organization. A private cloud can be physically located on the company’s onsite datacenter. 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, a hybrid cloud gives your business greater flexibility and more deployment options and helps optimize your existing infrastructure, security, and compliance. 

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), serverless, 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 it easier to accomplish your business goals.


The most basic category of cloud computing services. With infrastructure as a service (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) 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) 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.

Uses of cloud computing

You’re probably using cloud computing right now, even if you don’t realize it. If you use an online service to send email, edit documents, watch movies 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. A variety of organizations—from tiny startups to global corporations, government agencies to non-profits—have embraced cloud computing technology for all sorts of reasons.


Here are a few examples of what’s possible with cloud services from a cloud provider:

  • Create cloud-native applications

    Quickly build, deploy, and scale applications—web, mobile, and API. Take advantage of cloud-native[RM1]  technologies and approaches, such as containers, Kubernetes, microservices architecture, API-driven communication, and DevOps.

  • Store, back up, and recover data

    Protect your data more cost-efficiently—and at massive scale—by transferring your data over the internet to an offsite cloud storage system that’s accessible from any location and any device.

  • Stream audio and video

    Connect with your audience anywhere, anytime, on any device with high-definition video and audio with global distribution.

  • Deliver software on demand

    Also known as software as a service (SaaS), on-demand software lets you offer the latest software versions and updates to customers—anytime they need, anywhere they are.

  • Test and build applications

    Reduce application development cost and time by using cloud infrastructures that can easily be scaled up or down.

  • Analyze data

    Unify your data across teams, divisions, and locations in the cloud. Then use cloud services, such as machine learning and artificial intelligence, to uncover insights for more informed decisions.

  • Embed intelligence

    Use intelligent models to help engage customers and provide valuable insights from the data captured.

Microsoft and cloud computing

Microsoft is a leading global provider of cloud computing services for businesses of all sizes. To learn more about the Microsoft cloud platform and how Microsoft Azure compares to other cloud providers, see What is Azure? and Azure vs. AWS. And, to accelerate your cloud journey with best practices, resources, and expert help, see the Azure Migration and Modernization Program.

Frequently asked questions

  • The cloud is an extensive network of remote servers around the world. These servers store and manage data, run applications, and deliver content and services like streaming videos, web mail, and office productivity software over the internet. Storing your files and data in the cloud frees you from relying on local computers and servers. Instead, you can access your data online from any internet-capable device, whenever and wherever you want. 

    Learn more

  • Multicloud computing entails using multiple cloud computing services from more than one cloud provider for the same type of IT solutions or workloads. A multicloud strategy—which may include both private and public clouds—helps organizations mitigate risk and offers them increased workload flexibility. Choosing different offerings and capabilities from more than one cloud provider enables organizations to build solutions that are best suited to their specific IT needs.

    Learn more

  • In general, cloud computing does not require technical IT experience. Cloud computing simply refers to the delivery of computing services over the internet, including storage, databases, software, and analytics. Whether you have a basic understanding of computing concepts and terminology or are a more technical worker, you can apply the on-premises computing knowledge and skills you currently have to the cloud.

    Learn more

  • Cloud providers typically employ a pay-as-you-go pricing model, which means that organizations only pay for the cloud services that they use. This helps companies reduce their operating costs, run their infrastructure more efficiently, and scale their cloud computing costs up or down according to changing business needs. For example, Azure offers pay-as-you-go pricing with no upfront commitment and free services that include popular services free for 12 months and 55+ other services free always.