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What is Cloud Computing?

What is cloud computing

What is cloud computing?

Ten or twenty years ago, the concept of cloud computing was difficult to grasp. The notion of the invisible ‘cloud’ up in the sky storing our files and data seemed unnerving almost, and hard to comprehend. But fast forward to today, and cloud technology has transformed the way we work, relax and live.

Cloud computing is the model of providing computing resources over the internet. These resources include anything from hardware through to complete software solutions, each offering companies or individuals a place to host, manage and run workloads.

Many types of resources are available in the cloud. From data storage and disaster recovery solutions to high-level computing resources and networking options. Cloud technology gives businesses the freedom to design their own systems, then, it brings the flexibility needed to change and upgrade those systems when needed.

There are many cloud computing use cases. Companies can use it to work remotely, reduce IT infrastructure costs, or access more powerful technology. Cloud spending increased by $170 billion between 2020 and 2022 and, with advancing technologies like big data and artificial intelligence, is set to grow further.

So, what is cloud computing - and how does it work?

How cloud computing works

Cloud computing providers place IT infrastructure in data centres and make it available through the internet. Typical data centres are full of rows and rows of servers. These servers might be dedicated to just one workload or can provide resources for many tasks at once. They are connected by ultra-fast networking to each other, and the outside world.

Data centres are kept in ideal conditions with:

  • Managed temperatures from liquid cooling and air conditioning
  • Ideal spacing of equipment to prevent overheating
  • Efficient power usage.

Not only does this mean that servers perform efficiently, but it also ensures higher uptime. Cloud service providers then give companies access to these computing resources, allowing them to use their power and capabilities to design their ideal cloud environment.

Using cloud infrastructure instead of traditional on-premises IT equipment keeps upfront costs low and gives users access to the latest cloud technology.

When was cloud computing invented?

Despite being a relatively young technology, the story of cloud computing began decades ago. In the 1950s and 1960s, companies working with large mainframe computers realised that computers came with a limitation: only one user could use their processing power at any time.

The next step came in the 1970s with the idea of virtual machines (VMs). Software like VMWare let companies use one computer’s power to host two or more ‘virtual computers’ – effectively letting users share a resource. Virtualisation evolved in the 1990s with the invention of virtual private networks, which would become early cloud computing.

The name ‘cloud’ was invented by Compaq in 1996. It had become clear that the accessibility and connectivity of cloud services had the potential to revolutionise everyday technology. As awareness and technology advanced, major providers began to build tools for the wider public. Since then, cloud solutions have become a staple of everyday life - both in business and leisure.

What are the three types of cloud computing?

There are three main types of cloud computing: software as a service, platform as a service, and infrastructure as a service.

So what are the differences, and when might you use them?

Software as a Service (SaaS)

Software as a Service (SaaS) is a software solution hosted in the cloud. While traditional software had to be installed on each machine, SaaS applications are usually accessed through a web browser. For companies, this means easy deployment, no maintenance, and access from anywhere with an internet connection.

Due to that freedom, SaaS cloud applications have become increasingly common in business. They’re typically offered on a subscription basis, letting companies spread the cost. Users then simply navigate to the SaaS provider’s website, log in, and continue their work. SaaS is the most complete type of cloud technology.

Platform as a Service (PaaS)

Platform as a Service (PaaS) is a cloud solution that offers hardware, plus some essential software. Often, this software includes development tools and middleware. As the name suggests, companies then use their cloud platform to build their own software and apps.

It’s common to find PaaS solutions in software development and DevOps. PaaS gives developers the physical infrastructure and minimum tools needed to build new solutions in the cloud.

Infrastructure as a Service (IaaS)

Infrastructure as a Service (IaaS) is the most fundamental cloud service, simply providing users with hardware resources. With these, companies can host, deploy and build their own tasks and workloads in the cloud.

Typical IaaS resources give companies the essentials to create their own environments. Resources like data storage, servers, and networking are common, freeing companies from purchasing, installing, and managing these on-premises. Large IaaS providers include Amazon Web Services (AWS), and Microsoft Azure.

What are the types of cloud technology?

To understand the types of cloud computing services and the possibilities they create, it’s important to learn about public cloud and private cloud.

Public cloud

The public cloud is an IT resource managed by third-party cloud providers and used by many different companies. The companies using the cloud resource do not own the physical infrastructure. Instead, they rent the resources, connecting to them over the internet. When people think of ‘the cloud’, public cloud services are typically what they have in mind.

Private cloud

On the other hand, the private cloud is a computing infrastructure owned, maintained, and used by one organisation. These resources are typically kept on-premises or on dedicated servers in data centres, usually behind company firewalls. The private cloud is available to use over the internet – but only by specific users inside an organisation.

How do companies use public cloud and private cloud systems?

Companies choose public cloud, private cloud, or both depending on their specific use case. These systems are known as hybrid or multi-clouds.

Hybrid cloud: Combining public and private

The hybrid cloud combines a private cloud resource with a public cloud resource. This is typically used by companies that already own private infrastructure, or who keep data on private servers for compliance reasons. The association between private and public clouds is often managed by orchestration software like Kubernetes.

Multi-cloud: Two or more clouds

Multi-cloud is a combination of two or more cloud resources. The distinguishing feature of multi-cloud is that it only includes one type of cloud – public or private, but not both. This gives cloud-native companies ultimate freedom and mobility, letting them choose the best resource for each task.  

Benefits of cloud computing

Moving to the cloud brings companies a range of benefits.

Low maintenance

When using the public cloud, companies do not have to purchase, manage, or maintain physical servers. Instead, public cloud providers maintain the hardware, ensuring that the latest updates, upgrades, and patches are in place.

Cost savings

Pricing is typically one of the most impactful benefits of cloud technology. There are no upfront costs for hardware, no maintenance costs, and no need for a large IT team. Instead, companies simply pay for the resources they use. This self-service model helps companies keep IT costs down.


Security is one of the biggest concerns for every company. When storing sensitive data, companies must trust that their infrastructure stands up to various attacks. Public cloud security offers companies top-of-the-range security tools, including access controls, identification, and real-time information.

Mobility for end users

Moving to the cloud also gives end users freedom. They can log in from anywhere with an internet connection and use the system from many different devices. Companies hosting business solutions in the cloud often give employees access through web applications or a virtual desktop, letting them work from the office, home, or around the world.

Highly scalable and flexible

Plans change. To grow with your business, cloud technology offers quick deployment of new resources. Need more computing power or bandwidth? With the scalability of the cloud, you can add new resources rapidly – letting your IT system adapt to your business needs.

Peace of mind

Uptime is more crucial than ever. If systems go down, companies can lose customer trust and vital revenue. With cloud services, companies carry on as usual by switching to additional resources should one experience outages, always ensuring business continuity. There are also various cloud storage disaster recovery options, providing a safety net should something go wrong.

Cope with demand

With private IT infrastructure, it can be tricky to cope with fluctuating demand. Traffic and activity might vary due to workloads, seasonality, or unpredictable peaks. You can optimise your cloud resources to respond to increased traffic. Load balancing directs users to less crowded servers, while you can rapidly deploy additional resources to cope with demand when needed.

Access to cutting-edge technology

Cloud service providers offer leading technology and equipment. With their increased buying power, providers offer this equipment to companies on a pay-as-you-go basis. This gives users cost-effective access to resources that may be otherwise out of budget.

Drives sustainability

With fewer physical servers and potentially no need for an on-site data centre, businesses can significantly reduce their carbon footprint. Sustainability is a key goal for many companies today, and cloud computing is a strong step in achieving this goal. The nature of cloud architecture means less hardware meaning energy is used.

How cloud computing helps business

Cloud computing gives organisations more freedom than ever before. Companies can choose from a variety of compute resources, operating systems and open-source software to build their ideal system.

With advanced technologies becoming more widely used in business, cloud technology gives users access to the resources needed for:

  • Big data analytics
  • Artificial intelligence (AI)
  • Machine learning
  • Internet of things (IoT)
  • Augmented reality
  • Virtual reality

These can help companies get an edge over the competition without purchasing costly advanced IT infrastructure.

Cloud computing use cases

Different workloads need different resources. With cloud technology, businesses can:

  • Improve efficiency - Companies can automate or streamline repetitive tasks to save staff time.
  • Connect systems - Many cloud and SaaS providers offer simple APIs or interfaces that link existing business systems together.
  • Improve workflows - By taking workloads into a cloud environment, remote workers can collaborate with colleagues through shared data storage, messaging, and various SaaS tools.
  • Build ideal structures - Organisations have different priorities – some need low latency, some require lots of data storage, and others might need powerful computing resources. All are easily achievable within the cloud.

Whatever your unique need, cloud computing allows you to build a system that fits your business.

What are examples of cloud computing?

People use cloud computing every day for many different tasks. Some examples of cloud computing include:

  1. Amazon Web Services (AWS): AWS is typically seen as an IaaS solution, although it offers many different cloud services, including IaaS, PaaS and SaaS. Companies can use the many AWS tools to build their perfect cloud environment.
  2. Google App Engine: A popular PaaS service, Google App Engine gives developers hardware and essential software for business application development in the cloud.
  3. Salesforce: One of the earliest SaaS providers, Salesforce has grown to become one of the most popular pieces of business cloud software.
  4. Slack: An instant messaging and collaboration tool, Slack is an example of the growing productivity SaaS field.
  5. Dropbox: Another example of SaaS, Dropbox gives users cloud storage that they can access from any device.

Together, these examples show the almost unlimited possibilities offered by cloud computing.

In addition, a newer technology, edge computing, can also be combined with cloud computing to deliver faster response times, lower latency, and reduced network congestion, especially for applications that require real-time data processing and analysis.

The cloud gives organisations access to computing resources over the internet. Among its many benefits are cost savings, less maintenance, increased security, and leading technology – helping companies improve processes and get ahead of the competition.

At Nasstar, we help match companies with cloud technologies that suit their needs.

Speak to a specialist today to find your perfect cloud computing solution.


Frequently Asked Questions (FAQs)

What is cloud technology?

Cloud technology refers to delivering computing services, such as software, data storage, and processing power, over the Internet. These services are provided by a network of remote servers, collectively known as the "cloud". It enables users to access vast resources without needing on-premises hardware and infrastructure.

What are some examples of the cloud?

Some examples of cloud technology include Amazon Web Services, Microsoft Azure, Google Cloud Platform, iCloud, Dropbox, and Salesforce. These services provide a wide range of cloud computing solutions, such as virtual machines, databases, storage, bandwidth, software applications, and more, all delivered over the Internet.

What is serverless computing?

Serverless computing is a cloud computing model where cloud providers manage infrastructure and automatically allocate computing resources as needed. This is usually based on the demand of the application in question. Users do not have to worry about server management or capacity planning, only paying for the computing resources they consume.