What is Cloud Computing? Everything You Need to Know (2023)

By Tibor Moes / Updated: June 2023

What is Cloud Computing? Everything You Need to Know (2023)

What is Cloud Computing?

Cloud computing has revolutionized the way we store data, develop applications, and access IT resources. It has become a crucial component in the digital transformation of businesses across various industries. But what is cloud computing exactly, and why is it so essential in today’s world?

In this blog post, we will delve into the fundamentals of cloud computing, its advantages, deployment models, service models, and common use cases. By the end, you’ll have a clear understanding of how cloud computing can help your business thrive in the ever-evolving digital landscape.


  • Cloud computing is a way of providing hosted services over the internet, with key components like servers and databases. An example is the web hosting service that allows us to keep this website online.

  • Cloud computing offers businesses cost savings, flexibility, and improved performance while increasing security & reliability.

  • When choosing a cloud provider it’s important to evaluate their services offered, pricing plans & server location for an informed decision.

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Defining Cloud Computing

The term “cloud computing” might sound ethereal, but it’s simply a fancy way of saying that hosted services are available online. The inspiration behind the term comes from the cloud symbol used to depict the internet in diagrams and flowcharts. Cloud computing has been around since the 1950s and 1960s with the development of time-sharing, which allowed users to access multiple mainframes at the same time. The concept of virtual machines, introduced in the 1970s, played a significant role in the development of cloud computing. Fast forward to 1999, Salesforce became the first company to offer business applications on a website, and in 2006, Amazon launched AWS, giving us the cloud storage and computing services we know today.

At its core, cloud computing aims to offer simple, adjustable access to computing resources and IT services. The back end of a cloud environment is made up of databases, servers, and computers, which act as a storage area and maintain data that the front end can access. Cloud computing offers a great deal of flexibility for enterprises, as users can access the services from any location, and the services can be scaled up or down as necessary.

The Basics

Cloud computing is characterized by shared resources, network access, and remote data storage. The concept of virtualization has been a significant factor in the development of cloud computing, enabling multiple computing systems to run within a single physical setup. Remote data storage, another key aspect of the cloud, allows users to keep their data safe and secure on a cloud storage system that can be accessed from anywhere and on any device.

Time-sharing, which dates back to the late 1950s and early 1960s, was a stepping stone toward cloud computing. It was designed to make better use of costly processor time on mainframes by allowing users to access multiple mainframes simultaneously, maximizing processing power and minimizing idle time. This concept paved the way for the modern cloud computing infrastructure that we rely on today.

Key Components

The key components of cloud computing include servers, databases, and the networking hardware needed to provide a seamless experience for users. The most popular models of cloud services are Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Serverless computing, a relatively recent development in the cloud computing space, allows developers to build apps without having to manage the underlying infrastructure and servers.

Security is always a concern when adopting new technology, and cloud computing is no exception. Potential risks include outages, data loss, or theft. However, businesses can take steps to establish and maintain a secure cloud environment by staying up-to-date with security best practices and ensuring that their cloud provider has robust security measures in place.

Advantages of Cloud Computing

Cloud computing brings a plethora of benefits to businesses and organizations, including cost savings, flexibility and scalability, improved performance, increased security, and enhanced reliability. The ability to scale elastically in cloud computing means that organizations can easily acquire the exact amount of IT resources they need, whether that’s more or less computing power, storage, or bandwidth. This versatility allows businesses to stay agile and adapt to changing market conditions.

Moreover, cloud computing gives organizations access to the latest technology innovations, providing a competitive edge and helping them get the most out of their investment. For example, Microsoft, a major player in the cloud computing space, offers services to businesses of all sizes, keeping them at the forefront of technological advancements. By leveraging the power of cloud computing, businesses can stay ahead in their respective industries.

Cost Savings

One of the most significant advantages of cloud computing is cost savings. By adopting cloud computing services, organizations can reduce their IT expenses by cutting down on hardware, software, and maintenance costs. Instead of purchasing, maintaining, and upgrading expensive hardware and software, businesses can utilize cloud computing resources provided by cloud service providers. This approach enables organizations to only pay for the computing resources they need, leading to significant cost savings.

Additionally, cloud computing can help organizations save on operational and maintenance costs. With cloud computing, the responsibility for maintaining and updating hardware, software, and other infrastructure falls on the cloud provider, freeing up valuable time and resources for businesses. This reduction in overhead expenses can translate into increased profitability and more resources available for growth and innovation.

Flexibility and Scalability

Cloud computing offers businesses unparalleled flexibility and scalability. The ability to scale up or down IT resources according to need is a game-changer for organizations of all sizes. Scalability in cloud computing means that the cloud service can handle an increasing number of users, requests, or data without any decrease in performance. This flexibility empowers organizations to adjust their IT resources as needed to meet changing demands, allowing them to stay agile and responsive in a dynamic business environment.

Furthermore, cloud computing enables businesses to quickly adapt their IT resources to meet their needs. This agility is particularly beneficial for organizations experiencing rapid growth or fluctuations in demand, as they can easily add or remove resources as needed without incurring significant costs or delays.

By embracing the flexibility and scalability offered by cloud computing, businesses can better navigate the ever-evolving market landscape.

Enhanced Performance

Improved performance is another key advantage of cloud computing. Enhanced performance in cloud computing means that businesses can enjoy better network performance, uptime guarantees, automatic performance upgrades, faster product development and deployment, caching of frequently used data, using content delivery networks, load balancing, and setting standards and monitoring application performance.

Additionally, cloud computing can lead to lower latency and greater efficiency, providing businesses with a competitive edge. By leveraging the power of cloud computing, organizations can achieve faster and more reliable performance for their applications, ultimately improving the user experience for their customers.

This improvement in performance can translate into increased customer satisfaction, higher retention rates, and ultimately, more revenue for the business.

Increased Security

Security is a top priority for businesses, especially when it comes to sensitive data. Cloud computing providers take this responsibility seriously and implement robust security measures to protect their customers’ data and applications. Increased security in cloud computing involves implementing procedures and technology to protect against external and internal threats to business security, including investing in security innovation, consistent patching, and security management.

By relying on cloud providers for security, businesses can benefit from the policies, technologies, and controls put in place by these providers to strengthen their security posture. This increased security not only helps protect valuable data and applications, but also provides peace of mind for businesses and their customers.

Improved Reliability

Cloud computing is renowned for its reliability when it comes to data backup, disaster recovery, and business continuity. Improved reliability in cloud computing refers to the ability of cloud services to operate with minimal interruptions and errors. This can be achieved through various measures such as optimizing costs, monitoring performance, and applying security best practices.

By adopting cloud computing services, businesses can ensure that their data is securely stored and readily available in case of a disaster or system failure. This increased reliability not only helps protect valuable data, but also enables businesses to maintain operations and minimize downtime in the face of unexpected events.

Cloud Computing Deployment Models

There are three main types of cloud computing deployment models: public, private, and hybrid clouds. Each model offers its own unique set of advantages and is suited to different use cases and business needs. By understanding the differences between these models, businesses can make informed decisions about which cloud computing model is the best fit for their organization.

In the following sections, we will explore each of these cloud computing deployment models in more detail, discussing their features, benefits, and potential use cases. This information will help you determine which cloud computing model is best suited to your business needs, enabling you to harness the full power of the cloud.

Public Cloud

A public cloud is a cloud service provider that offers computing, storage, and network resources over the internet. Examples of public cloud providers include Microsoft Azure, Amazon Web Services, and Google Cloud Platform. Public clouds allow companies to access shared resources whenever they need them, tailored to their specific needs and goals. In a public cloud, the responsibility for maintaining and updating hardware, software, and other infrastructure falls on the cloud provider, freeing up valuable time and resources for businesses.

Public clouds are suitable for organizations that require a high degree of scalability and flexibility, as they can easily add or remove resources as needed. Additionally, public clouds often provide cost-effective solutions for businesses, as they only pay for the resources they use. However, public clouds may not be the best fit for organizations with strict security or compliance requirements, as data is stored on shared infrastructure.

Private Cloud

A private cloud is a computing infrastructure and environment dedicated solely to one organization. It offers extra security and control, and can be hosted on-site or by a third-party provider. Private clouds are often used by businesses that require a higher level of security and control over their data and applications, such as healthcare organizations or financial institutions.

Internal users can access a shared pool of computing, storage, and network resources, which can be highly beneficial for organizations with strict security or compliance requirements. Private clouds offer businesses many of the same benefits as public clouds, such as cost savings, flexibility, and scalability. However, they also provide the added benefit of increased control and security, making them an attractive option for organizations with specific regulatory or security requirements.

Hybrid Cloud

A hybrid cloud combines the best of both public and private cloud environments, offering organizations the advantages of both types of clouds while also meeting their specific needs. Hybrid cloud solutions enable organizations to unify and automate their infrastructures, taking advantage of public cloud infrastructure. At the same time, they also maintain control over important data and applications.

Hybrid clouds are suitable for organizations that want to leverage the benefits of both public and private clouds, such as cost savings, flexibility, scalability, enhanced performance, increased security, and improved reliability. They also provide businesses with the ability to move workloads, orchestrate, and manage them across multiple environments, enabling them to optimize their IT resources and achieve greater efficiency.

Cloud Service Models: IaaS, PaaS, and SaaS

In addition to the various deployment models, there are three main categories of cloud computing services: Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). Each service model offers different levels of control, flexibility, and management over the underlying infrastructure and resources. Understanding the differences between these service models can help businesses decide which type of cloud computing service best fits their needs.

In the following sections, we will delve into each of these cloud service models in more detail, discussing their features, benefits, and potential use cases. This information will help you determine which cloud computing service model is best suited to your business needs, enabling you to harness the full power of the cloud.

Infrastructure as a Service (IaaS)

Infrastructure as a Service (IaaS) is a type of cloud computing service that gives users access to computing resources such as servers, storage, and networking over the internet. IaaS is one of the three main categories of cloud computing services, alongside SaaS and PaaS. It provides organizations with on-demand access to IT infrastructure services, including computing, storage, networking, and virtualization.

IaaS offers the most control over IT infrastructure, making it an attractive option for businesses that require a high degree of customization and flexibility in their IT resources. With IaaS, organizations can easily scale up or down their infrastructure resources as needed, providing a cost-effective and agile solution for meeting changing business demands.

Platform as a Service (PaaS)

Platform as a Service (PaaS) is a type of cloud computing service that provides a comprehensive development and deployment environment in the cloud. PaaS gives developers the resources they need to create anything from basic cloud-based apps to complex, cloud-enabled enterprise applications. The benefits of using PaaS include faster development and deployment, scalability, and cost savings.

By leveraging PaaS, developers can access an on-demand environment to develop, test, deliver, and manage their software applications. This accelerates the development and deployment process, enabling businesses to bring their products to market faster and stay ahead of the competition.

Software as a Service (SaaS)

Software as a Service (SaaS) is a type of cloud computing service that gives users access to applications hosted on the cloud. SaaS is the most widely used of the three main categories of cloud computing services, alongside IaaS and PaaS. SaaS provides cost savings, time-to-value, scalability, and a vast selection of commercial software solutions.

SaaS applications are typically accessed through a web browser, a dedicated desktop client, or an API that works with a desktop or mobile operating system. This delivery method allows users to access the software from any device with an internet connection, providing a high degree of flexibility and convenience.

SaaS solutions can be particularly beneficial for businesses that require access to a wide range of software applications without the need to invest in expensive hardware and software infrastructure.

Common Cloud Computing Use Cases

Cloud computing capabilities offer a wealth of options and can be tailored to fit any business need. Some common uses for cloud computing include data storage and backup, application development and testing, big data analytics and AI, and streaming services. By understanding the various use cases for cloud computing, businesses can harness the power of the cloud to drive innovation, increase efficiency, and stay ahead of the competition.

In the following sections, we will explore each of these common cloud computing use cases in more detail, discussing their features, benefits, and potential applications. This information will help you determine how cloud computing can best support your business goals and objectives.

Data Storage and Backup

Data storage and backup are critical components of any business’s IT strategy, helping to ensure that essential data is protected and accessible. Cloud computing offers a wide range of storage options, including public cloud, private cloud, and hybrid cloud solutions. By leveraging cloud storage, businesses can enjoy various advantages such as cost savings, flexibility and scalability, improved performance, increased security, and enhanced reliability.

Cloud storage allows organizations to securely store their digital assets in case of a disaster or system failure. By utilizing cloud storage for data protection and accessibility, businesses can minimize the risk of data loss and downtime, ensuring that their operations remain uninterrupted and their valuable data is safeguarded.

Application Development and Testing

Cloud computing has transformed the way applications are developed and tested, offering numerous benefits for businesses and developers alike. By leveraging cloud-based tools and platforms, developers can quickly build, test, and deploy applications, accelerating the time-to-market and providing a competitive advantage.

With cloud computing, developers can access the resources they need on-demand, ensuring that they have the necessary computing power and storage to effectively develop and test their applications. This flexibility enables businesses to optimize their development processes and deliver high-quality applications that meet the needs of their customers.

Big Data Analytics and AI

Big data analytics and artificial intelligence (AI) are two emerging technologies that have the potential to revolutionize the way businesses operate and make decisions. Cloud computing provides the necessary infrastructure and resources to support these advanced analytics and AI solutions, enabling organizations to uncover valuable insights and make data-driven decisions.

By leveraging cloud-based machine learning and AI services, businesses can harness the power of advanced analytics to uncover patterns, trends, and insights that were previously inaccessible. This newfound knowledge can help businesses improve their decision-making processes, optimize their operations, and ultimately, drive growth and profitability.

Streaming Services

Streaming services have become increasingly popular in recent years, offering users access to a wide range of audio and video content on-demand. Cloud computing plays a crucial role in delivering high-quality streaming services, as it enables content to be stored on remote servers and streamed to users over the internet in real time.

By leveraging the power of cloud computing, streaming service providers can offer a seamless and reliable user experience, ensuring that their customers can access the content they want, when they want it. This increased accessibility and convenience have helped to drive the growth of streaming services, making them a popular choice for consumers worldwide.

Choosing a Cloud Provider

Selecting the right cloud provider is a critical decision for businesses looking to harness the power of cloud computing. Factors to consider when choosing a cloud provider include the services they offer, their pricing plans, the physical location of their servers, their reliability, and their security measures. By carefully evaluating these factors, businesses can make an informed decision about which cloud provider is the best fit for their organization.

To discuss your specific needs with a Google Cloud sales specialist, you can chat with them and get personalized advice on which cloud services are right for your business. By partnering with the right cloud provider, you can unlock the full potential of cloud computing and propel your business to new heights.


In conclusion, cloud computing has revolutionized the way businesses store data, develop applications, and access IT resources. By understanding the fundamentals of cloud computing, its advantages, deployment models, service models, and common use cases, businesses can make informed decisions about how to best leverage the power of the cloud. As the world continues to evolve, the importance of cloud computing will only grow, making it an essential tool for organizations looking to stay competitive and agile in the digital age. Embrace the power of the cloud and watch your business soar to new heights.

How to stay safe online:

  • Practice Strong Password Hygiene: Use a unique and complex password for each account. A password manager can help generate and store them. In addition, enable two-factor authentication (2FA) whenever available.
  • Invest in Your Safety: Buying the best antivirus for Windows 11 is key for your online security. A high-quality antivirus like Norton, McAfee, or Bitdefender will safeguard your PC from various online threats, including malware, ransomware, and spyware.
  • Be Wary of Phishing Attempts: Be cautious when receiving suspicious communications that ask for personal information. Legitimate businesses will never ask for sensitive details via email or text. Before clicking on any links, ensure the sender's authenticity.
  • Stay Informed. We cover a wide range of cybersecurity topics on our blog. And there are several credible sources offering threat reports and recommendations, such as NIST, CISA, FBI, ENISA, Symantec, Verizon, Cisco, Crowdstrike, and many more.

Happy surfing!

Frequently Asked Questions

Below are the most frequently asked questions.

What is cloud computing in a simple sentence?

Cloud computing is the use of remote servers connected over the internet to store, manage, and process data, instead of using a local server or a personal computer.

This way, users can access files and applications from anywhere with an internet connection, making their work easier and more efficient.

What is an example of cloud computing?

An example of cloud computing is the use of internet-based services such as email, video streaming, file sharing, and storage. These services are hosted on remote servers and accessed through the internet, allowing users to access their data and services from any device with an internet connection.

What does cloud computing actually do?

Cloud computing allows people to access and store data and applications over the internet, instead of on a physical hard drive. This means that you can access your data from anywhere in the world and don’t have to worry about it taking up space on your device.

It also comes with some added security and cost savings.

Author: Tibor Moes

Author: Tibor Moes

Founder & Chief Editor at SoftwareLab

Tibor is a Dutch engineer and entrepreneur. He has tested security software since 2014.

Over the years, he has tested most of the best antivirus software for Windows, Mac, Android, and iOS, as well as many VPN providers.

He uses Norton to protect his devices, CyberGhost for his privacy, and Dashlane for his passwords.

This website is hosted on a Digital Ocean server via Cloudways and is built with DIVI on WordPress.

You can find him on LinkedIn or contact him here.

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