What Is Cloud Computing?

Lou BichardMon, 12/09/2019 - 08:08

So you’ve heard about cloud computing, but you want to know more? There’s a lot more to cloud computing than simply offloading your IT department onto another company. There are also many different ways that you can engage in cloud computing, and they all have a different impact on your company. And these differences are what we’re going to explore today.

By the end of this article, you’ll understand what cloud computing is and be able to identify its key benefits and disadvantages. With your newfound cloud knowledge, you should be able to decide whether cloud computing is right for your company and how you want to engage with it.

Defining Cloud Computing

Let’s begin by defining cloud computing.

Cloud Computing is the practice of using remote servers, hosted by another company, for the purposes of storing data and/or performing computation.

Cloud is on-demand computing accessible (typically) via the internet. And cloud-based computing typically operates with a shared governance policy, which gives one company (the provider) the responsibility for the hardware and the other (the customer) the responsibility for what they’re running and operating on the hardware.

But there isn’t simply one type of cloud computing—there are different degrees in which you can engage in cloud computing, and different levels of responsibility that you can adopt, depending on your requirements. But what are they? Let’s take a look.

IaaS, PaaS, Serverless, and SaaS

Now, I know what you’re thinking: What in the world are those acronyms?! But before I frighten you off completely, let me break them down for you. The acronyms aren’t so bad once you understand them. And they can be a useful way to understand the different layers of cloud computing that we can engage with.

Infrastructure as a Service

IaaS is the rawest form of cloud computing. It typically refers to accessing raw cloud computing assets, such as servers, DNS, databases, storage, networks, and the like. IaaS gives you bare computing resources that are very flexible but also require a lot of maintenance and upkeep. The main players in the IaaS space are AWS, GCP, and Azure.

Platform as a Service

PaaS is one level up from IaaS, and it typically refers to services offered that abstract away some of the more low-level grunt work, like patching servers and rotating failed servers. A good example is a hosted database solution, which grants you access to the database, but you don’t have to worry about patching the underlying database software or updating the server.


Serverless is another step up from PaaS. It offloads infrastructure concerns almost completely to the cloud provider. As a user of serverless, you have no visibility and no control of the underlying hardware.

Software as a Service

SaaS is the highest-level cloud service you can engage in. In a SaaS world, all concerns, including infrastructure and the application, are taken care of by the provider. An example of a SaaS is Google Docs. With Google Docs, you can do as much work as you like without ever wondering whether more resources are needed to run your workload because Google is responsible for it.

Choosing the Right Cloud Computing Layer

With each layer of cloud computing, there often is a direct cost associated with the purchase. However, the lower level you choose to go with your cloud solution, typically the more operational overhead there will be, too.

The level in which you choose to engage with cloud computing depends on your use case. Generally speaking, business differentiating strategic decisions require the most flexibility and will want to be more control and lower level, whereas everyday nondifferentiating tasks are often offloaded to SaaS companies where possible.

By now you might be thinking about the different use cases where cloud would work for you. So let’s take a look at some of the key benefits that cloud computing provides as compared to the polar choice, on-premise computing.

Benefits of Cloud Computing vs. On-Premise

So far, we haven’t discussed the elephant in the room: on-premise computing. On the opposite side of the spectrum to cloud, we have on-premise computing. On-premise computing refers to company-owned physical hardware for running compute tasks. The reason we introduce on-premise now is because it’s important to have a comparison point to color our discussion about cloud.

So, what are the benefits of cloud computing?

Cloud Computing Is Often Cheaper

Cloud computing enables on-demand workloads. With on-demand, you can request new resources in almost real-time. The speed in which new resources can be created depends on the cloud we’re talking about. If it’s a SaaS product, such as a data warehouse, we may need to contact the provider to ask for an increase in storage capacity. But if we’re using an infrastructure provider, it’s likely that the process to access resources is automated, so gaining new compute capacity would be very quick and almost instantaneous.

And it’s because of this on-demand resource consumption that our cost goes down. With physical hardware, there are two choices. The first is to over-provision resources because you presume they’ll have use. However, you’ll pay the price if your assumption was wrong and resources are then dormant. Alternatively, you can under-provision but risk slowing down the company while they wait for new hardware, purchasing, and installation.

Cloud Computing Enables Agile Business

Agile is a buzzword in the technology industry. But, at its core, agile in a business context is characterized by the ability to respond to changes in the market quickly. Using cloud technology can help us build a business that responds fast to consumer demand—in other words, an agile business.

Let’s take an example: Your business provides compute-based services to its clients. One day, a new client makes a new order that requires a significant increase in your computing capacity. With an on-premise setup, you’d now need to suffer a time-lag as you wait for the provisioning of resources. However, with cloud, you could better respond to these demand changes and scale up your operations in a much shorter time frame, potentially keeping customers happier.

Cloud Computing Can Have More Choice

Another limitation of on-premise computing is the limit to your company of technology choice. An on-premise-based setup limits users to only the technology that is provided. Typically, the hardware is subject to lengthy bureaucracy around preferred suppliers, procurement cycles, and so on. With cloud computing, the problem of choice can be alleviated, because you’ll have access to a range of different solutions limited only by self-imposed restraints.

Reasons Not to Choose Cloud Computing

All this talk in favor of the cloud starts to make you wonder: Is there a scenario where on-premise makes sense for a company, or is it all cloud, all the time? You might be asking, Are there reasons we might choose not to go ahead with cloud computing? And the short answer is yes, there are. So, let’s take a look at those reasons now.

Unique Technical Use Cases

One legitimate reason to not engage in cloud computing is if you have a truly unique computing requirement. This is mainly likely if your company is large, or works in a unique industry with unique technology. An immediate example that springs to mind is Netflix. Netflix has its own Content Delivery Network (CDN), which allows them to globally distribute content that is close to their customers.

Netflix had specific requirements about where and what they wanted for their CDN. And the CDN was a business-differentiating strategic decision, so Netflix eschewed Cloud to build their own CDNs. Yet, we should note that Netflix is a poster-child for cloud. So, Netflix is using both on-premise and cloud to get the best of both.

Highly Regulated Industry

Another (commonly held) belief is that cloud computing doesn’t cater well to highly regulated industries, such as finance. But this belief isn’t completely correct. There are indeed certain cloud tools that a regulated company would struggle to use properly.

However, cloud providers are continuing to offer more solutions catering to highly regulated use cases. For example, infrastructure providers typically allow you to manage where you store your data, how you encrypt it, and who the other tenants are for your hardware. So, there might be a good regulatory reason that you can’t engage in cloud, but there are more solutions now than ever.

Find Cloud That Works for You

And that concludes our introduction to the world of cloud computing. I hoped that helped to begin clearing the mists of uncertainty around cloud computing and help you understand more about the benefits and trade-offs.

And, of course, with all business decisions, there are trade-offs. The same is true for cloud computing. So, it’s worth analyzing whether the benefits in your specific use case outweigh the costs. That said, there’s likely a solution for your use case, whether that’s infrastructure, serverless, or SaaS. So take the time, research the options, and experiment. Your customers will thank you, I’m sure!