Product Code Database
Cloud computing is "a paradigm for enabling network access to a scalable and elastic pool of shareable physical or virtual resources with self-service provisioning and administration on-demand," according to ISO.
The "cloud" metaphor for virtualized services dates to 1994, when it was used by General Magic for the universe of "places" that mobile agents in the Telescript environment could "go". The metaphor is credited to David Hoffman, a General Magic communications specialist, based on its long-standing use in networking and telecom. The expression cloud computing became more widely known in 1996 when Compaq Computer Corporation drew up a business plan for future computing and the Internet. The company's ambition was to supercharge sales with "cloud computing-enabled applications". The business plan foresaw that online consumer file storage would likely be commercially successful. As a result, Compaq decided to sell server hardware to internet service providers.
In the 2000s, the application of cloud computing began to take shape with the establishment of Amazon Web Services (AWS) in 2002, which allowed developers to build applications independently. In 2006 Amazon Simple Storage Service, known as Amazon S3, and the Amazon Elastic Compute Cloud (EC2) were released. In 2008 NASA's development of the first open-source software for deploying private and hybrid clouds.
The following decade saw the launch of various cloud services. In 2010, Microsoft launched Microsoft Azure, and Rackspace Hosting and NASA initiated an open-source cloud-software project, OpenStack. IBM introduced the IBM Cloud framework in 2011, and Oracle announced the Oracle Cloud in 2012. In December 2019, Amazon launched AWS Outposts, a service that extends AWS infrastructure, services, , and tools to customer data centers, co-location spaces, or on-premises facilities.
While cloud computing can offer cost advantages through effective resource optimization, organizations often face challenges such as unused resources, inefficient configurations, and hidden costs without proper oversight and governance. Many cloud platforms provide cost management tools, such as AWS Cost Explorer and Azure Cost Management, and frameworks like FinOps have emerged to standardize financial operations in the cloud. Cloud computing also facilitates collaboration, remote work, and global service delivery by enabling secure access to data and applications from any location with an internet connection.
Cloud providers offer various redundancy options for core services, such as managed storage and managed databases, though redundancy configurations often vary by service tier. Advanced redundancy strategies, such as cross-region replication or failover systems, typically require explicit configuration and may incur additional costs or licensing fees.
Cloud environments operate under a shared responsibility model, where providers are typically responsible for infrastructure security, physical hardware, and software updates, while customers are accountable for data encryption, identity and access management (IAM), and application-level security. These responsibilities vary depending on the cloud service model—Infrastructure as a Service (IaaS), Platform as a Service (PaaS), or Software as a Service (SaaS)—with customers typically having more control and responsibility in IaaS environments and progressively less in PaaS and SaaS models, often trading control for convenience and managed services.
Organizations with variable or unpredictable workloads, limited capital for upfront investments, or a focus on rapid scalability benefit from cloud adoption. Startups, SaaS companies, and e-commerce platforms often prefer the pay-as-you-go operational expenditure (OpEx) model of cloud infrastructure. Additionally, companies prioritizing global accessibility, remote workforce enablement, disaster recovery, and leveraging advanced services such as AI/ML and analytics are well-suited for the cloud. In recent years, some cloud providers have started offering specialized services for high-performance computing and low-latency applications, addressing some use cases previously exclusive to on-premises setups.
On the other hand, organizations with strict regulatory requirements, highly predictable workloads, or reliance on deeply integrated legacy systems may find cloud infrastructure less suitable. Businesses in industries like defense, government, or those handling highly sensitive data often favor on-premises setups for greater control and data sovereignty. Additionally, companies with ultra-low latency requirements, such as high-frequency trading (HFT) firms, rely on custom hardware (e.g., FPGAs) and physical proximity to exchanges, which most cloud providers cannot fully replicate despite recent advancements. Similarly, tech giants like Google, Meta, and Amazon build their own data centers due to economies of scale, predictable workloads, and the ability to customize hardware and network infrastructure for optimal efficiency. However, these companies also use cloud services selectively for certain workloads and applications where it aligns with their operational needs.
In practice, many organizations are increasingly adopting hybrid cloud architectures, combining on-premises infrastructure with cloud services. This approach allows businesses to balance scalability, cost-effectiveness, and control, offering the benefits of both deployment models while mitigating their respective limitations.
Another challenge of cloud computing is reduced visibility and control. Cloud users may not have full insight into how their cloud resources are managed, configured, or optimized by their providers. They may also have limited ability to customize or modify their cloud services according to their specific needs or preferences. Complete understanding of all technology may be impossible, especially given the scale, complexity, and deliberate opacity of contemporary systems; however, there is a need for understanding complex technologies and their interconnections to have power and agency within them. The metaphor of the cloud can be seen as problematic as cloud computing retains the aura of something Noumenon and numinous; it is something experienced without precisely understanding what it is or how it works.
Additionally, cloud migration is a significant challenge. This process involves transferring data, applications, or workloads from one cloud environment to another, or from on-premises infrastructure to the cloud. Cloud migration can be complicated, time-consuming, and expensive, particularly when there are compatibility issues between different cloud platforms or architectures. If not carefully planned and executed, cloud migration can lead to downtime, reduced performance, or even data loss.
The 2024 Flexera State of Cloud Report identifies the top cloud challenges as managing cloud spend, followed by security concerns and lack of expertise. Public cloud expenditures exceeded budgeted amounts by an average of 15%. The report also reveals that cost savings is the top cloud initiative for 60% of respondents. Furthermore, 65% measure cloud progress through cost savings, while 42% prioritize shorter time-to-market, indicating that cloud's promise of accelerated deployment is often overshadowed by cost concerns.
According to the Cloud Security Alliance, the top three threats in the cloud are Insecure Interfaces and APIs, Data Loss & Leakage, and Hardware Failure—which accounted for 29%, 25% and 10% of all cloud security outages respectively. Together, these form shared technology vulnerabilities. In a cloud provider platform being shared by different users, there may be a possibility that information belonging to different customers resides on the same data server. Additionally, Eugene Schultz, chief technology officer at Emagined Security, said that hackers are spending substantial time and effort looking for ways to penetrate the cloud. "There are some real Achilles' heels in the cloud infrastructure that are making big holes for the bad guys to get into". Because data from hundreds or thousands of companies can be stored on large cloud servers, hackers can theoretically gain control of huge stores of information through a single attack—a process he called "hyperjacking". Some examples of this include the Dropbox security breach, and iCloud 2014 leak. Dropbox had been breached in October 2014, having over seven million of its users passwords stolen by hackers in an effort to get monetary value from it by Bitcoins (BTC). By having these passwords, they are able to read private data as well as have this data be indexed by search engines (making the information public).
There is the problem of legal ownership of the data (If a user stores some data in the cloud, can the cloud provider profit from it?). Many Terms of Service agreements are silent on the question of ownership. Physical control of the computer equipment (private cloud) is more secure than having the equipment off-site and under someone else's control (public cloud). This delivers great incentive to public cloud computing service providers to prioritize building and maintaining strong management of secure services. Some small businesses that do not have expertise in IT security could find that it is more secure for them to use a public cloud. There is the risk that end users do not understand the issues involved when signing on to a cloud service (persons sometimes do not read the many pages of the terms of service agreement, and just click "Accept" without reading). This is important now that cloud computing is common and required for some services to work, for example for an intelligent personal assistant (Apple's Siri or Google Assistant). Fundamentally, private cloud is seen as more secure with higher levels of control for the owner, however public cloud is seen to be more flexible and requires less time and money investment from the user.
The attacks that can be made on cloud computing systems include man-in-the middle attacks, phishing attacks, authentication attacks, and malware attacks. One of the largest threats is considered to be malware attacks, such as Trojan horses. Recent research conducted in 2022 has revealed that the Trojan horse injection method is a serious problem with harmful impacts on cloud computing systems.
The NIST's definition of cloud computing describes IaaS as "where the consumer is able to deploy and run arbitrary software, which can include operating systems and applications. The consumer does not manage or control the underlying cloud infrastructure but has control over operating systems, storage, and deployed applications; and possibly limited control of select networking components (e.g., host firewalls)."
IaaS-cloud providers supply these resources on-demand from their large pools of equipment installed in data centers. For wide-area connectivity, customers can use either the Internet or (dedicated virtual private networks). To deploy their applications, cloud users install operating-system images and their application software on the cloud infrastructure. In this model, the cloud user patches and maintains the operating systems and the application software. Cloud providers typically bill IaaS services on a utility computing basis: cost reflects the number of resources allocated and consumed.
PaaS vendors offer a development environment to application developers. The provider typically develops toolkit and standards for development and channels for distribution and payment. In the PaaS models, cloud providers deliver a computing platform, typically including an operating system, programming-language execution environment, database, and the web server. Application developers develop and run their software on a cloud platform instead of directly buying and managing the underlying hardware and software layers. With some PaaS, the underlying computer and storage resources scale automatically to match application demand so that the cloud user does not have to allocate resources manually.
Some integration and data management providers also use specialized applications of PaaS as delivery models for data. Examples include iPaaS (Integration Platform as a Service) and dPaaS (Data Platform as a Service). iPaaS enables customers to develop, execute and govern integration flows. Under the iPaaS integration model, customers drive the development and deployment of integrations without installing or managing any hardware or middleware. dPaaS delivers integration—and data-management—products as a fully managed service. Under the dPaaS model, the PaaS provider, not the customer, manages the development and execution of programs by building data applications for the customer. dPaaS users access data through data-visualization tools.
In the software as a service (SaaS) model, users gain access to application software and databases. Cloud providers manage the infrastructure and platforms that run the applications. SaaS is sometimes referred to as "on-demand software" and is usually priced on a pay-per-use basis or using a subscription fee. In the SaaS model, cloud providers install and operate application software in the cloud and cloud users access the software from cloud clients. Cloud users do not manage the cloud infrastructure and platform where the application runs. This eliminates the need to install and run the application on the cloud user's own computers, which simplifies maintenance and support. Cloud applications differ from other applications in their scalability—which can be achieved by cloning tasks onto multiple virtual machines at run-time to meet changing work demand. distribute the work over the set of virtual machines. This process is transparent to the cloud user, who sees only a single access-point. To accommodate a large number of cloud users, cloud applications can be multitenant, meaning that any machine may serve more than one cloud-user organization.
The pricing model for SaaS applications is typically a monthly or yearly flat fee per user, so prices become scalable and adjustable if users are added or removed at any point. It may also be free. Proponents claim that SaaS gives a business the potential to reduce IT operational costs by outsourcing hardware and software maintenance and support to the cloud provider. This enables the business to reallocate IT operations costs away from hardware/software spending and from personnel expenses, towards meeting other goals. In addition, with applications hosted centrally, updates can be released without the need for users to install new software. One drawback of SaaS comes with storing the users' data on the cloud provider's server. As a result, there could be unauthorized access to the data. Examples of applications offered as SaaS are cloud gaming and productivity software like Google Docs and Office Online. SaaS applications may be integrated with cloud storage or File hosting services, which is the case with Google Docs being integrated with Google Drive, and Office Online being integrated with OneDrive.
Several factors like the functionality of the solutions, Costing, integrational and aspects as well as Security are influencing the decision of enterprises and organizations to choose a public cloud or on-premises solution. (2025). 9780998133102 ISBN 9780998133102
Varied use cases for hybrid cloud composition exist. For example, an organization may store sensitive client data in house on a private cloud application, but interconnect that application to a business intelligence application provided on a public cloud as a software service. This example of hybrid cloud extends the capabilities of the enterprise to deliver a specific business service through the addition of externally available public cloud services. Hybrid cloud adoption depends on a number of factors such as data security and compliance requirements, level of control needed over data, and the applications an organization uses.
Another example of hybrid cloud is one where IT organizations use public cloud computing resources to meet temporary capacity needs that can not be met by the private cloud.Metzler, Jim; Taylor, Steve. (2010-08-23) "Cloud computing: Reality vs. fiction" , Network World. This capability enables hybrid clouds to employ cloud bursting for scaling across clouds. Cloud bursting is an application deployment model in which an application runs in a private cloud or data center and "bursts" to a public cloud when the demand for computing capacity increases. A primary advantage of cloud bursting and a hybrid cloud model is that an organization pays for extra compute resources only when they are needed.Rouse, Margaret. "Definition: Cloudbursting" , May 2011. SearchCloudComputing.com. Cloud bursting enables data centers to create an in-house IT infrastructure that supports average workloads, and use cloud resources from public or private clouds, during spikes in processing demands.
The European Commission's 2012 Communication identified several issues which were impeding the development of the cloud computing market:European Commission, Unleashing the Potential of Cloud Computing in Europe, COM(2012) 529 final, page 3, published 27 September 2012, accessed 26 April 2024
In recent years, organizations have increasingly adopted alternative cloud providers, which offer specialized services that distinguish them from hyperscalers. These providers may offer advantages such as lower costs, improved cost transparency and predictability, enhanced data sovereignty (particularly within regions such as the European Union to comply with regulations like the General Data Protection Regulation (GDPR)), stronger alignment with local regulatory requirements, or industry-specific services.
Alternative cloud providers are often part of multi-cloud strategies, where organizations use multiple cloud services—both from hyperscalers and specialized providers—to optimize performance, compliance, and cost efficiency. However, they do not necessarily serve as direct replacements for hyperscalers, as their offerings are typically more specialized.
Cloud computing uses concepts from utility computing to provide metrics for the services used. Cloud computing attempts to address QoS (quality of service) and reliability problems of other grid computing models.
Cloud computing shares characteristics with:
See also
Notes
Further reading
(2025). 9780262029513, MIT Press. ISBN 9780262029513
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