Cloud Computing: What is it and How Does it Work? A Guide

cloud computing
Cloud Infra

With the COVID pandemic, came the worldwide need for remote working which in turn rapidly increased the demand for cloud services. According to a global market report for cloud computing, the industry had revenues of over $241 billion at the end of 2020.

It is expected to grow to $445 by the end of 2025. There has been a mainstream boost due to tremendous growth with Internet-connected devices (IoT) and the need for robust and scalable systems.

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What is Cloud Computing?

Cloud Computing delivers various services, tools, applications, and resources over the internet. It has revolutionized the way people use IT services. This is highly preferred for its pay-as-you-go model over traditional in-house IT infrastructure.

It aims to cut down the infrastructure cost so that businesses can focus on core business processes.

If you are not already aware of this incredible technology, now is a good time to understand its benefits. This article provides you with a broad understanding of cloud computing and its applications.

How does Cloud Computing work?

Cloud Computing refers to the delivery of on-demand services without the need to buy, own or maintain physical servers and data centers. This is enabled through a technique called virtualization.

This technique enables the separation of a physical computing device into multiple virtual machines that can be used by more than one customer. In a cloud computing system, a group of networked links provides services to the end clients.

These services are managed by a hosting provider with a suite of hardware and software to be easily accessible over the internet; hence called a cloud.

It is the responsibility of the hosting company to maintain massive data centers to provide high computing power, storage capacity, and the security required for performing the functions that are requested by the users.

The user’s computer only needs to be able to run the cloud interface software and the decentralized network takes care of the rest. Since the cloud works in a distributed computing environment, it allows sharing of resources thus offering scalability and reliability.

Types of Cloud Computing

Now that we have understood how Cloud Computing works, let’s understand the different types of clouds available. There are many deployment models for the cloud but we will be focussing on the three important types that dominate the market.

1- Public Cloud

In a public cloud, the services are delivered over the public internet and are open to all to use for free or through a pay-per-usage subscription. Here, the on-demand computing services and infrastructure is managed by the public cloud service provider and shared with many organizations.

Although a public cloud can be availed at a low cost with high flexibility, it is considered less secure since the resources are shared publicly and the customers may not have full control of where the data is stored.

2- Private Cloud

A private Cloud is also called an internal cloud or a corporate cloud since it is maintained solely for a single organization. This kind of architecture can be used to manage data internally, externally, or via third-party depending on their needs.

A private cloud is preferred over a public cloud for its high level of security and privacy to organizations. With increased control of the resources, it offers better performance and efficient on-demand services.

But the biggest drawback is managing and operating a private cloud. Especially in-house clouds need skilled staff and infrastructure. This might increase the operating costs for the organization.

Thus, a private cloud does not take advantage of the less hands-on management or the economic model of pay-per-use that makes cloud computing a lucrative technology.

3- Hybrid Cloud

As the name suggests, a Hybrid cloud is a combination of Public and Private clouds. This model can offer the perks of security like a Private cloud and scalability like a public cloud.

A hybrid cloud is suitable for organizations that prioritize storing sensitive client data in their private cloud while offering services over the public cloud. This offers a flexible way for organizations to provide new products and services without worrying about the risks involved.

Types of Cloud Computing Services

The most common Cloud Services include the infrastructure, platform, or software that is hosted by a provider and made available to the users over the internet. There are three main types of cloud computing service models used for different purposes that we have listed below.

1- Infrastructure as a Service(IaaS)

IaaS is also called Hardware-as-a-Service, where a cloud service provider manages the entire infrastructure from servers, storage, and network, to providing virtualization. They also provide an interface for the users to access them.

In this model, the entire management of the hardware is transferred to the service provider and the user’s responsibility will be maintaining the software layer, middleware, and OS, thereby reducing the cost and complexity of maintaining physical servers.

2- Platform as a Service (PaaS)

In PaaS, along with the hardware, the runtime environment is also provided by the cloud service provider. Here, the user only has to run the applications on the platform and manage the related data that the application needs.

This model primarily applies to programmers who can leverage the shared cloud platform to develop, run, deploy, test, and manage their applications. They also allow integrations with multiple application frameworks, programming languages, and databases.

3- Software as a Service (SaaS)

Saas, as the name suggests is responsible for delivering software service to the users. It is also called an on-demand service since they are typically purchased via the pay-per-use model.

In this service, the entire stack from hardware to the application is maintained by the service provider and users can access these services through a web browser or mobile app. This model is used widely in our everyday life – email services, social networks, video conferencing, document storage, and so on.

Advantages of Cloud Computing

As we have seen so far, using the cloud model that is fit for your organization can be very cost-effective and reduces the burden of maintaining a huge infrastructure. However, there are some more advantages of cloud computing that make it a compelling technology to not miss.

1- There is increased storage capacity. It is also easier to back up and restore data whenever we want through the cloud.

2- Since the resources are accessible over the internet, it gives the flexibility to access them from anywhere. With resources shared over the internet, it makes collaboration with other users is effective.

3- Clouds also provide secure storage solutions through encryption and customizable security settings.

4- Many cloud service providers also offer cloud insights to analyze organization-wide information and build action plans to meet the organization’s goals.

5- The loss of data can happen due to theft, cyber-attacks, malfunctioning, hardware deterioration, power outages, or even human error and clouds help prevent these circumstances.

Disadvantages of Cloud Computing

1- Since data and services are hosted over the internet, there is a huge dependence on good connectivity. On the other side, a poor network can also lead to service downtime that users have no control over.

2- Because clouds are maintained by a service provider, there is limited control over the function and execution of services or the backend infrastructure.

3- Vendor lock-in is another perceived disadvantage that arises when trying to transfer from one vendor to another. Since each vendor offers diverse platforms, there can be complications during the migration of services.

4- Although cloud service providers are responsible for providing the best security standards, it is still vulnerable to attacks. So, users must understand the shared responsibility model and opt for non-sensitive data to store on the public cloud.

Uses of Cloud Computing

We have already seen the various cloud computing services like IaaS, PaaS, and SaaS where layers of physical servers and software are provided as a service through APIs. Additionally, cloud computing applications are widely used in many other sectors of the IT industry.

1- Cloud Storage is suitable for storing data in the form of blocks, files, or objects, which makes accessing and editing data easy.

2- Backup and Restore is a solution used by many organizations to prevent data loss.

3- Big Data Analysis takes advantage of Cloud Computing as it requires hefty resources to perform its computations.

4- Communication and Social Networks can be built over the cloud to store user information and makes it easy to access from any device and, any part of the world.


By 2025, it is estimated that over 50% of data will be stored on the cloud. Likewise, SaaS services will manage at least 75% of the entire workload. While cloud computing is gaining high traction in the IT world, there are still those who prefer to have in-house servers.

According to IBM, companies that have deployed cloud models for their organizations have been enjoying a competitive advantage over others. They have found to make better relationships with their customers through data-driven decision-making obtained through cloud insights.

Reducing the in-house infrastructure, there are lower costs and not to forget lesser burden on the environment. With all the convenience and benefits a cloud has to offer, this is a great time for organizations to jump on the bandwagon and avail the power of cloud computing.

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