What Is Cloud Computing: The Benefits and Uses

  • 5

The term “cloud computing” is interesting, it’s really popular, yet hard to understand for the average person.

As a business student who originally had trouble getting to know the meaning of cloud computing.

I’ll try to explain it in simple terms.

What is Cloud Computing in Simple Terms?

Back in the days, if you want to create a web application and display it to the web, you would need to buy a hardware server.

what is cloud computingA server is crucial for running your web pages on the world wide web(www), so that when someone accesses your site from their computer using a browser (the client), a request can be sent to your server and return the web page back to the user’s client.

However, buying these servers were costly and ineffective.

Because if, for example, you only need one and half servers to provide the computing power, you would still need to purchase two servers.

These costs were extremely pricey for most people who now have access to affordable computing power through cloud services.

Cloud computing removes the need to purchase physical servers by providing these services over the web.

Now I just need to create an account on amazon web services, set up a virtual server (EC2) and data storage (S3) all on my laptop via the internet.

And then I pay for exactly the amount of computing power and data storage I use.

How do companies make money with cloud computing?

Companies that provide cloud computing services (amazon, microsoft, google) purchase server farms themselves.

They make money by charging users for accessing it via the internet for computing power and data storage on their servers.

This is a significant innovation because it’s exponentially cheaper and more efficient for anyone to run a web application.

Thus, barriers to entry in the internet space have substantially diminished.

Cloud Computing Types

  • Infrastructure as a service (Iaas)
  • Platform as a service (Paas)
  • Software as a service (Saas)

Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS) are just fancy classification terms that describe how low-level these services are.

In other words how much granular control you have over your server and data storage systems and application.


An IaaS like amazon web services lets you control almost everything from the ground up, such as load balancing (I don’t know much here) etc.


A PaaS, like Heroku or Google App Engine, lets you develop your own web application and deploy it to their servers but already has the specific server and data storage settings implemented for you.

This is a nice option for those who want to quickly deploy to the web and have little to no experience in systems administration.


Lastly, SaaS is pretty much everything else.

SalesForce is an example of a SaaS for businesses, while web apps like Quora or Twitter could certainly be classified as SaaS for consumers.

SaaS is essentially access to a web application that lets you carry out certain functions without having to code it up yourself.

I think this is where lots of the confusion surrounding whether cloud computing is truly innovative stems from.

Generally, one will not consider SaaS as an innovation in the last decade; it’s been around longer than that.

However, it’s not cloud computing as a broad term.

But rather specific subsections of cloud computing, particularly PaaS and IaaS, that have revolutionized the online business landscape in the past decade.

Now, what exactly is cloud computing?

Cloud computing is a technology that uses the internet and central remote servers to maintain data and applications.

Cloud computing allows consumers and businesses to use applications without installation.

Users can access their personal files on any computer with internet.

This technology allows for much more efficient computing by centralizing storage, memory, processing and bandwidth.

In its simplest form, cloud computing consists of shared computing resources that are virtualized and accessed as a
service, through an API.

The cloud enables users in an organization to run applications by deploying them to the cloud, a
virtual datacenter.

The physical resources may reside in a number of locations inside and outside of an organization: on local hardware, or in an enterprise data center, or at a managed service providers on a pay-to-use basis.

Cloud computing resources are offered as a service on an as needed basis, and delivered by IP-based connectivity, providing
highly scalable, reliable on-demand services with agile management capabilities.

Cloud Computing Is In Different Forms:

  • Public Clouds: The cloud infrastructure is available to the general public or a large industry group and it is the organization that sells and owns cloud services.
  • Private Clouds: The cloud infrastructure operates solely for an organization. It is the organization or a third party that manages, and may exist on premise or off premise
  • Hybrid Clouds (which combine both public and private): The cloud infrastructure is a composition of two or more clouds (private, community, or public) that remain unique entities but are bound together by standardized technology that enables data and application portability (e.g., cloud bursting).

In general, the cloud, similar to its namesake of the cumulus type, is fluid and can easily expand and contract.

This elasticity means that users can request additional resources on demand and just as easily deprovision (or release) those resources when they’re no longer important.

This elasticity is one of the main reasons individual, business, and IT users are moving to the cloud.

In the traditional data center it has always been possible to add and release resources.

However, this process couldn’t be done in an automated or self -service manner.

Benefits of Cloud Computing

  1. Reduced Cost: Cloud technology is paid incrementally, saving organizations money.
  2. Increased Storage: Organizations can store more data than on private computer systems.
  3. Highly Automated: No longer do IT personnel need to worry about keeping software up to date.
  4. Flexibility: Cloud computing offers much more flexibility than past computing methods.
  5. More Mobility: Employees can access information wherever they are, rather than having to remain at their desks.
  6. Allows IT to Shift Focus: No longer having to worry about constant server updates and other computing issues, government organizations will be free to concentrate on innovation.

Uses of Cloud Computing

1. Cloud Office Suites

Office suites are easily accessible through web browsers, and you can use it regardless of the operating system. No need to install the packages on local devices, software versions are updated regularly by the service provider.

Cloud office suites gives you the opportunity to share documents and files.

The most popular office suites are Google Apps for Work, Microsoft Office 365 and Zoho Docs.

2. Cloud Storage Services

Allows companies to avoid buying additional hardware for data storage, maintenance in order to prevent data loss, and regular activities in data backup.

These cloud services enable data sharing between company’s employees as well as between company and its partners, customers, suppliers, etc.

Among the most popular cloud storage services are Dropbox, Box, Google Drive & OneDrive.

3. Cloud Business Information Systems

Today business information systems are an extremely critical factor that provides the necessary information for decision-making.

Companies implement different software applications from traditional (accounting, human resource, warehousing) programs to integrated software solutions (CRM, ERP, BI, etc.).

Information systems are expensive softwares which is a large investment for companies and needs proper IT infrastructure.

More vendors offer cloud based versions of business information systems.

Cloud solutions allow transforming the big investment cost into operating expenses, which is suitable for small and medium-sized companies and start-ups.

In conclusion

Cloud technologies are important part of business because they have the potential for flexibility, speed and efficiency of all business processes and activities.

The transfer of business in clouds empowers companies to achieve significant economic benefits without having to invest in building their own IT infrastructure.

Cloud computing should not be regarded only as a means of achieving greater savings in terms of hardware and software.

They are a prerequisite for building a strategy for business development that transforms the overall activity of companies and over time will lead to more effectiveness and flexibility.

Was this helpful?

Share this article and follow us on our facebook page for updates.

Other posts you may also like: