What cloud computing is and how it became so popular?

Cloud computing is on-demand access, via the internet, to computing resources, applications, servers, data storage, development tools, networking capabilities, and more—hosted at a remote data center managed by a cloud services provider. The CSP makes these resources available for a monthly subscription fee or bills them according to usage. Cloud computing involves delivering computing services including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet to offer faster innovation, flexible resources, and economies of scale. 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.

Cloud computing also refers to the technology that makes cloud work. This includes some form of virtualized IT infrastructure—servers, operating system software, networking, and other infrastructure that’s abstracted, using special software, so that it can be pooled and divided irrespective of physical hardware boundaries. For example, a single hardware server can be divided into multiple virtual servers.

How does it function?

Instead of owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider. One benefit of using cloud-computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use when they use it. In turn, providers of cloud-computing services can benefit from significant economies of scale by delivering the same services to a wide range of customers.

Cloud computing services

Cloud-computing services cover a vast range of options now, from the basics of storage, networking, and processing power, through to natural language processing and artificial intelligence as well as standard office applications. Pretty much any service that doesn't require you to be physically close to the computer hardware that you are using can now be delivered via the cloud, even quantum computing.

Examples of cloud computing

Cloud computing comprises a vast number of services. That includes consumer services like Gmail or the cloud backup of the photos on your smartphone, though to the services that allows large enterprises to host all their data and run all of their applications in the cloud. For example, Netflix relies on cloud-computing services to run its video-streaming service and its other business systems, too. Cloud computing is becoming the default option for many apps: software vendors are increasingly offering their applications as services over the internet rather than standalone products as they try to switch to a subscription model. However, there are potential downsides to cloud computing, in that it can also introduce new costs and new risks for companies using it.

Types of cloud computing

Public cloud: The public cloud provider owns, manages, and assumes all responsibility for the data centers, hardware, and infrastructure on which its customers’ workloads run, and it typically provides high-bandwidth network connectivity to ensure high performance and rapid access to applications and data.

Private cloud: Private cloud is a cloud environment in which all cloud infrastructure and computing resources are dedicated to, and accessible by, one customer only. Private cloud combines many of the benefits of cloud computing—including elasticity, scalability, and ease of service delivery—with the access control, security, and resource customization of on-premises infrastructure.

Hybrid cloud: Hybrid cloud is just what it sounds like—a combination of public and private cloud environments. Specifically, and ideally, a hybrid cloud connects an organization's private cloud services and public clouds into a single, flexible infrastructure for running the organization’s applications and workloads.

Multicloud and hybrid multicloud: Multicloud is the use of two or more clouds from two or more different cloud providers. Having a multicloud environment can be as simple using email SaaS from one vendor and image editing SaaS from another. But when enterprises talk about multicloud, they're typically talking about using multiple cloud services—including SaaS, PaaS, and IaaS services—from two or more of the leading public cloud providers. In one survey, 85% of organizations reported using multicloud environments.

Benefits of cloud computing

It is cost effective. No more buying servers, updating applications or operating systems, or decommissioning and disposing of hardware or software when it is out of date, as it is all taken care of by the supplier. For commodity applications, such as email, it can make sense to switch to a cloud provider, rather than rely on in-house skills. A company that specializes in running and securing these services is likely to have better skills and more experienced staff than a small business could afford to hire, so cloud services may be able to deliver a more secure and efficient service to end users.

Using cloud services means companies can move faster on projects and test out concepts without lengthy procurement and big upfront costs, because firms only pay for the resources they consume. This concept of business agility is often mentioned by cloud advocates as a key benefit. The ability to spin up new services without the time and effort associated with traditional IT procurement should mean that it is easier to get going with new applications faster. And if a new application turns out to be wildly popular, the elastic nature of the cloud means it is easier to scale it up fast.

Moving to a cloud-hosted application for services like email or CRM could remove a burden on internal IT staff, and if such applications don't generate much competitive advantage, there will be little other impact. Moving to a services model also moves spending from capital expenditure (capex) to operational expenditure (opex), which may be useful for some companies.

Future and scope of cloud computing

Cloud computing is reaching the point where it is likely to account for more of enterprise tech spending than the traditional forms of delivering applications and services in-house that have been around for decades. However, use of the cloud is only likely to climb as organisations get more comfortable with the idea of their data being somewhere other than a server in the basement. And now cloud-computing vendors are increasingly pushing cloud computing as an agent of digital transformation instead of focusing simply on cost. Moving to the cloud can help companies rethink business processes and accelerate business change, goes the argument, by helping to break down data any organisational silos. Some companies that need to boost momentum around their digital transformation programmes might find this argument appealing; others may find enthusiasm for the cloud waning as the costs of making the switch add up.