cloud computing

This definition is part of our Essential Guide: Working with Enterprise ALM: Mobile, cloud and more
Contributor(s): Stephen J. Bigelow

Cloud computing is a general term for the delivery of hosted services over the internet.

Cloud computing enables companies to consume a compute resource, such as a virtual machine (VMs), storage or an application, as a utility -- just like electricity -- rather than having to build and maintain computing infrastructures in house.

Cloud computing boasts several attractive benefits for businesses and end users. Three of the main benefits of cloud computing are:

  • Self-service provisioning: End users can spin up compute resources for almost any type of workload on demand. This eliminates the traditional need for IT administrators to provision and manage compute resources.
  • Elasticity: Companies can scale up as computing needs increase and scale down again as demands decrease. This eliminates the need for massive investments in local infrastructure which may or may not remain active.
  • Pay per use: Compute resources are measured at a granular level, allowing users to pay only for the resources and workloads they use.

Cloud computing deployment models

Cloud computing services can be private, public or hybrid.

Private cloud services are delivered from a business' data center to internal users. This model offers versatility and convenience, while preserving the management, control and security common to local data centers. Internal users may or may not be billed for services through IT chargeback.

In the public cloud model, a third-party provider delivers the cloud service over the internet. Public cloud services are sold on demand, typically by the minute or hour. Customers only pay for the CPU cycles, storage or bandwidth they consume. Leading public cloud providers include Amazon Web Services (AWS), Microsoft Azure, IBM SoftLayer and Google Compute Engine.

Hybrid cloud is a combination of public cloud services and on-premises private cloud -- with orchestration and automation between the two. Companies can run mission-critical workloads or sensitive applications on the private cloud while using the public cloud for bursting workloads that must scale on demand. The goal of hybrid cloud is to create a unified, automated, scalable environment that takes advantage of all that a public cloud infrastructure can provide while still maintaining control over mission-critical data.

Cloud computing service categories

Although cloud computing has changed over time, it has been divided into three broad service categories: infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS).

IaaS providers, such as AWS, supply a virtual server instance and storage, as well as application program interfaces (APIs) that let users migrate workloads to a virtual machine. Users have an allocated storage capacity and can start, stop, access and configure the VM and storage as desired. IaaS providers offer small, medium, large, extra-large and memory- or compute-optimized instances, in addition to customized instances, for various workload needs.

In the PaaS model, providers host development tools on their infrastructures. Users access these tools over the internet using APIs, web portals or gateway software. PaaS is used for general software development, and many PaaS providers will host the software after it's developed. Common PaaS providers include's, AWS Elastic Beanstalk and Google App Engine.

SaaS is a distribution model that delivers software applications over the internet; these applications are often called web services. Microsoft Office 365 is a SaaS offering for productivity software and email services. Users can access SaaS applications and services from any location using a computer or mobile device that has internet access.

A brief summary of what IaaS,
PaaS and SaaS are and how to
use each.

Cloud computing security

Security remains a primary concern for businesses contemplating cloud adoption -- especially public cloud adoption. Public cloud providers share their underlying hardware infrastructure between numerous customers, as public cloud is a multi-tenant environment. This environment demands copious isolation between logical compute resources. At the same time, access to public cloud storage and compute resources is guarded by account logon credentials.

Many organizations bound by complex regulatory obligations and governance standards are still hesitant to place data or workloads in the public cloud for fear of outages, loss or theft. However, this resistance is fading as logical isolation has proven reliable and the addition of data encryption and various identity and access management (IAM) tools has improved security within the public cloud.

This was last updated in October 2016

Next Steps

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