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What is Cloud Computing? Understanding Cloud for Business

Cloud computing” is a phrase many of us hear but may not understand. This is because it encompasses several different systems and services, making it feel ambiguous or confusing.

This article shares a simple definition of cloud computing, examples of computing and discusses why companies use cloud computing.

Simple Definition of Cloud Computing

Cloud computing uses off-site systems to help computers store, manage, process, and communicate information. These off-site systems are hosted on the cloud (or the internet) instead of on your computer or other local storage. They can encompass anything from email servers to software programs, data storage, or even increasing your computer’s processing power.

The “cloud” is a term that simply means “the internet.” Computing involves the infrastructures and systems that allow a computer to run and build, deploy, or interact with information. In cloud computing, this means that instead of hosting infrastructure, designs, or applications on your hard drive or an on-site server, you’re hosting it on virtual/online servers that connect to your computer through secure networks.

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What is Cloud Computing and How Does It Work

A simple definition of cloud computing involves delivering different types of services over the Internet. Everything can be delivered via the cloud, from software and analytics to secure and safe data storage and networking resources.

You probably use different cloud-based applications every day. You are benefiting from cloud solutions every time you send a file to your colleague via the web, use a mobile app, download an image, binge a Netflix show, or play an online video game. All these services are stored in the cloud and exist in some digital space.

Storing your information on OneDrive, SharePoint, or an email server is much different from keeping that data on a desktop hard drive or a USB stick. You can access it from just about any computer that has internet access.

For businesses, cloud computing means improved collaboration and productivity, as well as significant cost reductions. It means better data protection, improved availability, and expanded access to cutting-edge technologies.

Five Characteristics of Cloud Computing

What exactly makes something a cloud? According to the National Institute of Standards and Technology (NIST), there are five defining characteristics of cloud computing:

  • On-demand self-service: You can use it whenever you need it and pay peruse. Think of it as electricity. In essence, a cloud is a form of utility computing. You create an account or pick your provider, and your services will be available to you anytime. You are billed at the end of the month only for what you used. This form of storing and accessing your data gives you complete control over your resource usage and spending.
  • Broad network access: You must access from across the web using any device with internet connectivity. Wherever you are, your cloud data will be accessible through web browsers, as well as on a laptop or mobile device. The reason for this is the fact its underlying infrastructure includes servers on multiple locations.
  • Resource pooling: Multiple tenants can share the same space, and resources can be assigned, re-assigned, and distributed as needed. You can be anywhere globally and still have equal access as everyone else, provided you have internet access.
  • Rapid elasticity: Cloud can grow and shrink as much as possible without affecting its users or information. For example, if your business is experiencing peak traffic, the cloud can expand to accommodate all the new requests.
  • Measured service: You can examine how often people are using the cloud. Many cloud service providers utilise a pay-as-you-go model to ensure that their clients are getting what they pay for, no more and no less. Once again, this can be compared to electricity as you get billed for the amount you use.

Examples of Cloud Computing

Cloud computing is the use of hardware or software off-site that is accessed over networks for computing needs. Examples of cloud computing depend on the type of cloud computing services being provided.

The main types of cloud computing include software as a service, platform as a service, and infrastructure as a service. Serverless computing, also known as function as a service (FaaS), is also a popular method of cloud computing for businesses.

  • SaaS or Software as a Service. SaaS means instead of installing software on your computer; you access the platform online. Examples would include:

com, which hosts sales information and databases online

Square, which processes payments online

Google Apps such as Google Drive or Calendar

Slack, which allows collaboration and chat between other users

  • IaaS or Infrastructure as a Service. IaaS provides infrastructure components such as servers, storage, networking, security, and the cloud. Examples would include:
    • Dropbox, file storage and sharing system
    • Microsoft Azure, which offers backup and disaster recovery services, hosting, and more
    • Rackspace, which offers data, security, and infrastructure services.
  • PaaS or Platform as a Service. PaaS provides computing platforms such as operating systems, programming language execution environments, databases, and web servers. Examples would include:
    • Google App Engine and Heroku, which allow developers to develop and serve apps
  • Serverless Computing. Serverless computing (also called simply “Serverless”) is simply using a server on the cloud. This offers more elasticity, easier maintenance and is often more price effective than hosting servers on-site.

Types of Cloud Computing

Public Cloud

Public cloud services are best for development systems and web servers. Your cloud computing provider will give you a slice of their digital space that they must share with other tenants.

These types of clouds are cost-efficient since a pay-as-you-go model operates most. You pay for the number of hours you need to use the cloud and exit whenever you complete your work. There are no obligations that require you to pay more than you need.

Private Cloud

Private clouds offer what their name suggests: privacy. You do not have to share your digital space with anyone else. Private cloud platforms are typically built in-house, and they belong to you and your business. They can also be configured in a  third-party data centre and still provide an advanced level of privacy.

Larger organisations and clients who are concerned about security favour private clouds. The reason for this is primarily the fact that these clouds offer more defence than their public counterparts. Companies that need to protect sensitive information like customer data rely on private clouds.

If you are using a private cloud, you know who has access to the data, know if anyone made changes, and know what to do in case of an emergency. You have complete control over what happens to the cloud and don’t have to worry about some third-party vendor making changes that would negatively affect you. A firewall protects everything in your cloud from outsiders.

Hybrid Clouds

Hybrid clouds are the best of both worlds. If you are using a hybrid cloud, you can control an internal database and use the public cloud when needed. There might be times when you will need to move data and applications from the private cloud to the public cloud, such as scheduled maintenance, blackouts, and natural disasters. The ability to seamlessly migrate information is perfect for cloud-based disaster recovery and preventing data loss.

The flexibility of hybrid clouds is excellent for scaling as any overflow can regulate in the public cloud. Furthermore, you can keep all non-sensitive tasks in the public cloud while safeguarding the essential data in the private cloud.

Regardless of how large your company is or what industry it serves, there will always be a cloud solution that best fits your needs. Take the time to compare the advantages and disadvantages of each kind before deciding.

Do Cloud Computing Services Have Physical Servers?

Yes. Cloud computing still needs servers to function; the servers are just “virtualised.” This means instead of your application, system, or processes running off a single on-site server, they use multiple servers, often in various locations connected and your device over secure virtual networks. This allows the cloud computing service provider to provide services to various people, scale according to client volume, and deliver the service anywhere with an internet connection.

Why Does Your Business Need Cloud Computing?

Your company is probably already using several cloud computing services. For instance, all hosted email providers, including Gmail and Outlook, are SaaS cloud computing services. So are popular CRMs and automated marketing platforms such as Salesforce, Hubspot, Mailchimp, and more.

However, for many companies, additional examples of cloud computing services include:

  • Virtual Machines
  • Data Storage
  • Backup & Disaster Recovery
  • Increasing Bandwidth
  • App Development Platforms
  • Cloud-Based Servers
  • Infrastructure Monitoring & Management
  • Build, Host, & Deploy SaaS Services


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Benefits of Cloud Computing

The examples mentioned above are just the tip of the iceberg. Cloud computing has so many uses that it seems almost impossible to count them all. Every company can find help for cloud services one way or another.

1. Always-on Available Storage

Once again, the cloud provides an easy way to hold all your necessary data. You can rent cloud storage at a low price and scale it according to your demands. You no longer have to use an external hard drive or build an in-house data centre.

2. Disaster Recovery Solutions

You need data protection when catastrophe strikes. Preventing as much data loss as possible is critical regarding time, money, and efficiency. Cloud provides a much faster and cost-effective disaster recovery than traditional solutions could ever offer.

Sometimes, the best way to deal with a tragedy is to prepare for it beforehand. You should always consider any worst-case scenarios since most catastrophic events are unplanned. 

Before cloud computing, you would have to distribute and collect various tapes and drives and then transfer the data to a central location. Now, you can just click a few buttons and have it done for you.

3. Cost Savings

You no longer need to buy a ton of external hard drives to keep your critical information. Companies can save up to 43% annually by migrating virtualised operating system instances in the cloud. In addition to that, the cloud gives you access to professional staff, advanced security systems, and cutting-edge hardware and software, which adds up to the projected savings.

Cloud service providers who utilise a pay-as-you-go model are beneficial since you will never have to spend money on services you are not using.

Compare this to a monthly subscription service where you must pay to apply for the entire month regardless of how often you use it. If you use a monthly subscription service for only two weeks, you will get half of your money’s worth.

4. Consistent Updates

The software is continuously being improved to increase security, efficiency, speed, capability, and reliability. 

On the other hand, updated hardware would require you to purchase a new device to enjoy the recent improvements. Software updates are consistent and usually don’t need any extra costs.

5. Business Continuity

Ensuring business operability in case of a disaster is a significant challenge for most organisations. However, when a single minute of downtime can cost you more than implementing a backup and disaster recovery solution, business continuity management becomes a priority.

The cloud offers disaster recovery and business continuity solutions. You can rely on it to keep your data and applications active even if a disaster physically strikes your business. With a solid business continuity plan and the right cloud solutions, you can minimise the effects of potential disruptions.

6. Improved Collaboration

People can work together more efficiently and efficiently than ever before. Who needs to book a conference room or take an international flight when large groups of people from all over the world can merely meet over a Skype call? Nobody needs to print out copies of the latest report since they can access it from the cloud.

You might work for a large international company with locations across the world. Whether your offices are in India, China, Australia, Ireland, Brazil, or America, every employee has the same access to relevant information via cloud technology. Plus, you can utilise cloud solutions by merely opening your phone. How convenient is that?

Cloud collaboration tools offer essential advantages to employees. They can make use of file versioning or real-time editing at any time. They can access data, applications, and services remotely from any device. All that boosts their productivity and, eventually, the company’s profits.

7. Increased Capacity

You no longer need to guess if you will have enough ability to build or destroy an application. Clouds can adjust upwards and downwards depending on what your business needs. The flexibility ensures that you will always be able to utilise cloud services regardless of your business.

8. Performance And Speed

The cloud commoditises enterprise-grade technology, making it available to smaller companies as well. This form of utility computing makes emerging technologies available to businesses at an affordable price point.

You can access high-performance hardware and software to improve your operations. The open-based delivery model makes cloud resources accessible to businesses of any size. You just need to pick the solution that meets your needs best.

9. Data Security

Keep your data secure and make sure that it does not fall into the wrong hands.

Cloud backups are an ideal solution to ensure your files’ business continuity and always-on availability. All clouds offer some degree of encryption, deterrent, and compliance, but private clouds remain the most secure from outsiders. Even so, you must beware of internal attacks.

Future of Cloud Computing For Business

More companies are abandoning on-prem computer hardware in favour of the much more advanced cloud architecture. As computing technology develops, businesses naturally leave behind their older ways and switch to cutting-edge solutions.

Experts know that the influence of cloud technologies will only expand, but the question remains as to how quickly they will grow. Here are some expert predictions:

  • Global cloud spending is anticipated to reach $390 billion by 2020.
  • 92% of all data will be in the cloud by 2020.
  • Cisco Global Index estimates that 74% of total cloud workloads will be SaaS workloads, 17% will be IaaS, and 8% will be PaaS by 2020.
  • Public cloud infrastructure will store 68% of cloud data, and private clouds will save 32% of cloud data.
  • Forrester predicts that customers who were hesitant to cloud adoption will become the fastest-growing user segment and grow by 30% in 2018.
  • Only the future can confirm how accurate these predictions are, but there’s one thing you can be confident of: the cloud is here to stay. The future is evolving, and it is almost impossible to tell just what crazy new ideas will dominate the world five years from now.
  • We no longer need dial-up, film development, CDs, maps, floppy discs, movie rental stores, maps, VCRs, CDs, or PDAs. Those technologies have all been outdated and made obsolete by newer and better inventions. It is only a matter of time before we have A.I. and self-driving cars.
  • There may still be applications for USB drives and similar devices, but you will probably always back them up on your cloud anyways. Hardware might not ever become entirely obsolete, but it is no longer in its heyday. Like how Netflix killed Blockbuster and how eBooks brought the death of Borders, cloud services will reign supreme over hardware in the years to come.
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