How does Cloud Computing Work? A Step-by-step Guide

Cloud Computing is an on-demand service that has obtained mass appeal in corporate data centers. The cloud enables the data center to operate like the Internet and computing resources to be accessed and shared as virtual resources in a secure and scalable manner.

Like most technologies, trends start in the enterprise and shift to adoption by small business owners. For a small and medium-size business (SMB), the benefits of cloud computing are currently driving adoption.

In the SMB sector, there is often a lack of time and financial resources to purchase, deploy and maintain an infrastructure (e.g. the software, server, and storage).

Cloud Computing Technology

In fact, there are many people out there who believe the term cloud computing is just another buzzword that is used to describe too many technologies. Making it confusing to understand.

The term has been used over the years to mean a number of technologies. Such as grid computing, utility computing, software-as-a-service (SaaS), Internet-based applications, autonomic computing, peer-to-peer computing, and remote processing.

Moreover, when most people use the term, they may have one of these ideas in mind, but the listener might be thinking about something else.

What is Cloud Computing?

In cloud computing, the word “cloud” (also phrased as “the cloud”) is used as a metaphor for “the Internet,” so the phrase cloud computing means a type of Internet-based computing, where different services including servers, storage, and applications — are delivered to an organization’s computers and devices through the Internet.

Simply put, cloud computing is the delivery of computing services, servers, storage, databases, networking, software, analytics, intelligence and more. Particularly over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale.

Cloud Computing

In addition, you typically pay only for the cloud services you use. Moreover, this helps to lower your operating cost, run your infrastructure more efficiently, and scale-up during a business change.

In cloud computing, small businesses can access these resources using an Internet connection and a Web browser. You can expand (or shrink) services as your business needs change.

How does Cloud Computing Work?

In the first place, while cloud services all work a little differently, many provide a friendly, browser-based dashboard that makes it easier for IT professionals and developers to order resources and manage their accounts.

Cloud denotes a computing platform that is outside of an organizations’ firewalls on shared systems. In this scenario, your cloud service provider is in control of the infrastructure. In contrast, a private cloud is the same platform. However, it is implemented within the corporate firewall, under the control of the organization’s IT department.

A private cloud is designed to offer the same features and benefits of public cloud systems. But, it removes a number of objections to the computing model. Including control over corporate and customer data, worries about security and issues connected to regulatory compliance.

Why move to the Cloud services?

An example of a cloud computing file storage provider is Dropbox. Dropbox files can be accessed from any device via the Internet. In another example, on-premises or off, public or private, bare metal or multi-cloud, IBM Cloud makes it faster and easier to create innovative experiences with the latest technologies.

Equally important, build new Artificial Intelligence (AI) apps. Particularly, that learn from every interaction, modernize core systems with microservices and lift and shift VMware apps without massive rework.

Additionally, the right data architecture provides a solid foundation for AI to improve organizational processes, create enriching customer experiences and pursue new revenue streams. Even though you’re on a journey with no shortage of complexity.

The IBM Cloud is designed to make your life easier. Especially with the right tools that integrate, broker and give you greater visibility across all your vendors, clouds and IT to maximize the value of your new and existing investments. Learn more about IBM’s faster, and more secure journey to the cloud.

Who uses Cloud Computing services?

For instance, corporates and government entities utilize cloud computing services to address a variety of applications and infrastructure needs. Such as CRM, database, computing, and data storage.

As a result, organizations have greater agility and can manage expenses more efficiently. Similarly, consumers utilize cloud computing services to simplify application utilization, store, share, and protect content, and enable access from any web-connected device.

Here are a few examples of what’s possible today with cloud services from a cloud provider:

1. Create new apps and services

Quickly build, deploy, and scale applications—web, mobile, and API—on any platform. But, to access the resources you need to help meet performance, security, and compliance requirements.

2. Test and build applications

Reduce application development cost and time by using cloud infrastructures that can easily be scaled up or down.

3. Store, back up and recover data

Protect your data more cost-efficiently—and at massive scale—by transferring your data over the Internet to an offsite cloud storage system that’s accessible from any location and any device.

4. Analyze data

Unify your data across teams, divisions, and locations in the cloud. Then use cloud services, such as machine learning and artificial intelligence, to uncover insights for more informed decisions.

5. Stream audio and video

Connect with your audience anywhere, anytime, on any device with high-definition video and audio with global distribution.

6. Embed intelligence

Use intelligent models to help engage customers and provide valuable insights from the data captured.

7. Deliver software on demand

Also known as software as a service (SaaS), on-demand software lets you offer the latest software versions and updates around to customers—anytime they need, anywhere they are.

What are the Benefits of Cloud Computing?

You’re probably using cloud computing right now, even if you don’t realize it.

If you use an online service to send an email, edit documents, watch movies or TV, listen to music, play games, or store pictures and other files, it’s likely that cloud computing is making it all possible behind the scenes.

Cloud Computing Service Solutions

For your information, the first cloud computing services are barely a decade old. But already a variety of organizations—from tiny startups to global corporations, government agencies to nonprofits—are embracing the technology for all sorts of reasons.

By the same token, cloud computing is a big shift from the traditional way businesses think about IT resources. In general, here are seven common reasons organizations are turning to cloud computing services:

Reduced running Cost

Cloud computing eliminates the capital expense of buying hardware and software. As well as setting up and running on-site datacenters—the racks of servers, the round-the-clock electricity for power and cooling, the IT experts for managing the infrastructure. It adds up fast.

High-performance Expectations

The biggest cloud computing services run on a worldwide network of secure data centers, which are regularly upgraded to the latest generation of fast and efficient computing hardware.

This offers several benefits over a single corporate data center, including reduced network latency for applications and greater economies of scale.

Large scale Productivity

On-site datacenters typically require a lot of “racking and stacking”—hardware set up, software patching, and other time-consuming IT management chores. Cloud computing removes the need for many of these tasks, so IT teams can spend time on achieving more important business goals.

Improved and increased Speed

Most cloud computing services are provided self-service and on-demand, so even vast amounts of computing resources can be provisioned in minutes, typically with just a few mouse clicks, giving businesses a lot of flexibility and taking the pressure off capacity planning.

High-end Security

Many cloud providers offer a broad set of policies, technologies, and controls that strengthen your security posture overall, helping protect your data, apps, and infrastructure from potential threats.

Global-scale Coverage

The benefits of cloud services include the ability to scale elastically. In cloud speak, that means delivering the right amount of IT resources—for example, more or less computing power, storage, bandwidth—right when it’s needed, and from the right geographic location.

Types of Cloud Computing Technology

Not all clouds are the same and not one type of cloud is right for everyone. Several different models, types, and services have evolved to help offer the right solution for your needs. There are different types of cloud computing; including public, private, and hybrid.

First, you need to determine the type of cloud deployment, or cloud computing architecture, that your cloud services will be implemented on. There are three different ways to deploy cloud services: on a public cloud, private cloud, or hybrid cloud.

1. Public Cloud Computing

Public clouds are owned and operated by a third-party cloud service providers. Which delivers their computing resources like servers and storage over the Internet. Microsoft Azure is an example of a public cloud.

With a public cloud, all hardware, software, and other supporting infrastructure is owned and managed by the cloud provider. You access these services and manage your account using a web browser.

2. Private Cloud Computing

A private cloud refers to cloud computing resources used exclusively by a single business or organization. A private cloud can be physically located on the company’s on-site datacenter.

Some companies also pay third-party service providers to host their private cloud.

3. Hybrid Cloud Computing

Hybrid clouds combine public and private clouds. Specifically bound together by technology that allows data and applications to be shared between them. Eventually, by allowing data and applications to move between private and public clouds.

A hybrid cloud gives your business greater flexibility, more deployment options, and helps optimize your existing infrastructure, security, and compliance.

IaaS, PaaS, serverless, and SaaS Services

Most cloud computing services fall into four broad categories. Including, infrastructure as a service (IaaS), platform as a service (PaaS), serverless, and software as a service (SaaS). They are also called cloud computing stacks because they build on top of each other.

Knowing what they are and how they’re different makes it easier to accomplish your business goals. In addition, cloud computing services have several common attributes: which includes;

  • Virtualization: Utilizing the server and cloud storage virtualization extensively. Especially in allocating and or reallocating resources rapidly.
  • Multi-tenancy: Pooling and sharing the resources among multiple users gaining an economy of scale.
  • Network-access: Accessing resources via web-browser or thin client using a variety of networked devices (computer, tablet, smartphone).
  • On-demand: Self-provisioning resources from an online catalog of pre-defined configurations.
  • Elastic: Automatically scaling the resources down or up.
  • Metering/chargeback: Tracking and billing of the resources usage based on the service arrangement

Among the many types of cloud computing services delivered internally or by third-party service providers, the most common are:

Infrastructure as a service (IaaS)

To point out, this is the most basic category of cloud services. With IaaS, you rent IT infrastructure servers and virtual machines (VMs). Also, the storage, networks, operating systems from a cloud provider on a pay-as-you-go basis. To learn more, see What is IaaS?

Platform as a service (PaaS)

In reality, a platform as a service refers to cloud services that supply an on-demand environment. Such as for developing, testing, delivering, and managing software applications.

PaaS is designed to make it easier for developers to quickly create web or mobile apps. Especially without worrying about setting up or managing the underlying infrastructure of servers, storage, network, and databases needed for development.

Serverless Cloud Computing

Overlapping with PaaS, serverless computing focuses on building app functionality. Especially without spending time continually managing the servers and infrastructure required to do so.

On the other hand, the cloud provider handles the setup, capacity planning, and server management for you. Serverless architectures are highly scalable and event-driven. Surprisingly, only using resources when a specific function or trigger occurs.

Software as a service (SaaS)

Software as a service is a method for delivering software applications over the Internet. Especially, on-demand and typically on a subscription basis. Moreover, with SaaS, cloud providers host and manage the software application and underlying infrastructure.

Additionally, they handle any maintenance like software upgrades and security patching. In this case, users connect to the application over the Internet. Usually with a web browser on their phone, tablet, or PC.

Microsoft and Cloud Computing

As a matter of fact, Microsoft is a leading global provider of cloud services for businesses of all sizes.

To learn more about the Microsoft cloud platform, our serverless application platform, and how Microsoft Azure compares to other cloud providers, see What is Azure? and Azure vs. AWS.


Eventually, cloud services are changing how businesses and public institutions use information technology. That’s why, for example, today cloud services are readily available to meet most ICT needs.

Although there’s great variety among cloud computing services, all such services have certain basic features. And benefits in common, where all can be categorized into a few basic cloud service types.


I hope the above-revised guide was helpful. But, for additional contributions, suggestions or even questions, please Contact Us. If you’ll have a personal thought you’d like us to address or help you with, share in the comments box.

Below are more useful and related topic links;

  1. Dell EMC Glossary: Cloud Services
  2. Microsoft Azure: What is cloud computing – Beginner’s Guide
  3. Akamai: Cloud Computing Services Features and Benefits
  4. Sevaa Group: Cloud & Computing Benefits
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