Cloud Computing Explained


Cloud computing is a concept involving several types of businesses. Given the number of competing entities within the cloud, many erroneous or differing assumptions have emerged about what cloud computing is. In general terms it is aimed at Customers who want to purchase cloud services “rent” resource usage from a third-party service provider. They no longer need to own the physical infrastructure traditionally tied to the services. Instead, customers use resources like they do services, and pay only for the resources that they use.

Cloud services have a number of characteristics that differentiate them from traditional hosting services. These include: 

Pay As You Go Model

Users consume computing and storage services on demand and pay for them as they go, using an Operating Expenses (OPEX) budget, instead of paying for infrastructure resources up-front using CAPEX. 

Scalable Capacity

Instead of tapping from a fixed set of resources, users can add or remove capacity at will, almost instantaneously, and pay only for what they actually use.

While pricing lets users pay as they go, flexible resource capacity lets them pay as they grow or shrink. Therefore, accounts can be added or removed without adding new servers or disk drives, allowing the organization to respond more quickly and efficiently to fluctuating business needs. 


Cloud computing is not possible without virtualization, because cloud computing requires multi-tenancy. To benefit from economies of scale, cloud computing is based upon the sharing of a common infrastructure by multiple groups of users, often referred to as tenants. 

Fully Managed and Owned by the Provider

Software upgrades, data backups and the countless other tasks required to manage mission-critical business applications on a day-to-day basis become the responsibility of a third party, according to well-defined SLAs. 

Self-Service Provisioning

With cloud computing, business end-users can provision applications and user accounts with a few mouse clicks. The applications and accounts become available instantly.


The IT services that comprise Cloud as a service are divided into four categories:

  1. Infrastructure as a service or IAAS, like Amazon Web Services, allows a company to pay for only as much capacity as is needed and bring more capacity online as soon as required.
  2. Platform as a service or PAAS in the cloud is defined as a set of software and product development tools hosted on the provider’s infrastructure.
  3. Software-as-a-service or SAAS cloud model, the vendor supplies the hardware infrastructure and the software product and interacts with the user through a front-end portal.
  4. Storage as a service or STAAS is a business model in which a large storage infrastructure company rents space to an organization or individual.


There are two types of clouds-public clouds and private clouds.

Public Cloud. A public cloud sells services to anyone on the Internet, whereas a private cloud is a proprietary network or a data center that supplies hosted services to a limited number of people.

Private Cloud. When a service provider uses public cloud resources to create its private cloud, the result is called a virtual private cloud. The goal of both private and public cloud computing is to provide easy, scalable access to computing resources and IT services.

To find out how Cloud Computing can fit into your business Contact us