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Cloud computing is the delivery of computing services over an Internet connection rather than having those services “live” on local hardware or the user’s computer. Such services can include servers, storage, databases, backups, networking, software, and analytics. The advantages of this method include cost, scaling, and flexibility.

Simply put, users rent remote access to anything from applications to storage from a cloud service provider. The provider’s remote hardware (storage, service, CPUs, etc.) replace or augment the user’s local, privately-owned equipment.

Because this rental agreement is generally inexpensive and flexible, the largest tangible benefit of the cloud is costs. Specifically, the cloud allows enterprises to avoid significant capital expenses and upfront tech investments.

The evolution of cloud computing has made nearly every computing service imaginable available via the cloud. The most straightforward options include remote storage of data, but offerings include running software by remote or moving a company’s entire IT infrastructure to a cloud provider. Popular software applications are available through the cloud, as are important IT tools like data backup and recovery.

Cloud computing underpins a vast number of services. That includes consumer services like Gmail or the cloud backup of the photos on your smartphone, though to the services that allow large enterprises to host all their data and run all of their applications in the cloud. For example, Netflix relies on cloud-computing services to run its its video-streaming service and its other business systems, too.

Cloud computing is becoming the default option for many apps: software vendors are increasingly offering their applications as services over the internet rather than standalone products as they try to switch to a subscription model. However, there are potential downsides to cloud computing, in that it can also introduce new costs and new risks for companies using it.

The “cloud” concept illustrates the fundamental idea behind the service: locations are not important. In effect, users and providers of cloud services can exist in a vague “cloud” structure because mapping out their geography is completely irrelevant. The only thing that matters is that users and providers have a connection to the internet.

The term “cloud computing” is relatively recent (the early 2000s) but computing as a service has been around almost as long as computers themselves. Even in the 1960s, computing centers would let companies rent time on their giant, expensive mainframes. Enterprises with computing needs loved this option as an alternative to buying and maintaining those tech monsters themselves.

The rise of the personal computer eventually made owning a computer much more affordable. Then corporate data centers became more commonplace. These trends led to a lull in the need for “time sharing” of IT infrastructure and hardware.

Thanks to advances in internet speeds, cloud computing has hit a new Renaissance. Broadband and wireless speeds are quick enough to allow software and operating systems to run remotely at real-time speeds, and massive amounts of data can be transmitted or synced very rapidly. This allows to users to use nearly limitless remote resources as if they’re sitting in their own office or data center.

Investments in cloud computing infrastructure now accounts for a significant chunk of all IT spending as traditional, in-house IT continues to transition to the cloud. This includes growth in public cloud services offered by vendors and private clouds built by enterprises who use them internally.

Gartner analysts predict that as much as half of spending across application software, infrastructure applications, business services, and system infrastructure will have moved to the cloud by 2025. In addition, trends show that nearly two-thirds of spending on application software will move to cloud software,  a huge increase from 57.7% in 2022.

Infrastructure as a Service (IaaS) includes fundamental components of computing that can be rented like physical or virtual servers, storage space, and networking elements.

Platform as a Service (PaaS) includes the underlying storage, networking, and virtual servers much like IaaS, but also includes the tools and software that developers need to build applications. This could include devkit software, database management, and operating systems.

Software as a Service (SaaS) is the delivery of applications as a cloud-based service. Most internet users are familiar with SaaS because they’re likely using it on a daily basis. In this model, end users buy licenses to run their needed software tools remotely, usually on a per-seat or per-user basis.

SaaS represents the majority of current cloud spending because of how many critical enterprise applications are now delivered via SaaS. Everything from CRMs like Salesforce to Microsoft’s Office 365 are cloud based. Cloud is growing rapidly across the board, but the IaaS and PaaS segments are consistently growing at much faster rates.

End users frequently need to spread their cloud utilization across multiple suppliers. This requirement has lead to the rise of multi-cloud, which carries some benefits. Multicloud allows enterprises to avoid being locked in to just one vendor (and potential price increases), and it allows users to customize their mix of tech.

There’s a growing need for easy integration of cloud services from multiple vendors, and it sometimes provides a challenge for businesses and providers. Managing multiple cloud providers is not always easy with the current available technology.

Precise benefits will vary depending on which types of cloud service are being used and the company that’s using them. First and foremost, end-users benefit from not having to buy or maintain their own expensive IT infrastructure.

Hassles like buying servers, updating and patching, and asset management are all taken care of by the cloud supplier. Typically, a specialized provider is able to deliver more efficient and secure services than any in-house IT team would be able to — or at least they can do it at a much lower cost. This means a reduction in the need for internal IT staff and further cost savings.  Moving to a cloud-hosted application for services like email or CRM could further lessen the burden on internal IT staff.

With cloud, companies can devote more resources to projects and test out concepts while only paying for resources they actually need. The ability to spin up new services without traditional IT procurement costs make scaling and agility key benefits of the cloud.

Cloud computing is not always cheaper than other forms of computing when computed over the long term. A predictable and essential enterprise application could be more efficiently supported with in-house resources.

Because SaaS services are used by so many different enterprises — including competitors — it’s possible that SaaS tools won’t offer the user any real competitive advantages. In cases where it’s viable, the enterprise may garner more advantage from developing their own proprietary software solutions.

Migrations can be costly and, at times, risky. In-house IT teams often lack the experience to safely execute full cloud migrations. Enterprises can minimize risks by turning to cloud specialists or qualified MSPs to help.

It’s important to remember that SaaS applications can only be used when there is an internet connection. For some use cases (or disaster preparedness scenarios) this can pose a problem.

Building a business case for cloud migration is primarily a matter of understanding the costs of your existing infrastructure. Include the cost of physical hardware like servers, data centers, line leases, and the details of specifications like CPUs, cores and RAM and data storage.

Determine the future of your software needs. Will you switch to SaaS solutions? Move existing apps to the cloud? Will you need to build your own solutions from scratch?

How will cloud migration affect IT labor? Will internal IT needs decrease, or will new cloud specialists need to be added or outsourced?

Will any existing capital expenses become operational expenses?

The above considerations apply to any cost implications of cloud migration.

Cloud adoption grew slowly for the first few years largely because of concerns about security. These days, modern secure providers have all but eliminated those fears. In fact, most cloud providers are able to offer security at levels even higher than most enterprises were enjoying with their own in-house infrastructure thanks to the introduction of scaled security solutions and specialized expertise. In short, cloud providers are dedicated to securing their infrastructure because their entire business depends on it.

Add in the fact that end users can supplement security with additional security tools, such as backups, encryption, and local endpoint security tools, and cloud cybersecurity becomes quite manageable. While it’s true that no system can ever be 100% secure, cloud environments can now be just as secure as any local system.

Public cloud describes the classic cloud-computing model that most people associate with the word “cloud”. This is where users anywhere in the world can access a pool of computing power via an internet connection. This includes software, infrastructure, or any other resources that are delivered by the provider.

Private cloud is a way for users to benefit from many cloud advantages without relinquishing control over data and services. In simplest terms, an enterprise builds its own cloud behind their corporate firewall. This way, companies can control exactly where their data is being held and can build the infrastructure to their own specs.

This method comes at a cost, as the economy of scale is largely lacking and the enterprise will need to pay more for their services. They will also be responsible — in full — for their own security.

Hybrid cloud is a combination of public and private cloud, and generally the most common model that most companies are actually using. This is because they’re usually splitting data between public and private clouds, using multiple vendors and providers, and spreading their overall cloud usage over a variety of different solutions and frameworks.

It’s generally very inexpensive for small businesses and startups to migrate to or start out on the cloud. It’s a bit more complicated when it comes to larger enterprises with existing applications and data. This is a potentially risky and expensive move, and it’s recommended that such enterprises consult with experienced cloud providers to determine the best way to move forward.

When it comes to IaaS and PaaS, most people recognize the key players. Amazon Web Services leads the market with Microsoft’s Azure, Google, and IBM following behind. According to Synergy Research, Amazon, Microsoft, and Google control over half of worldwide cloud spending and post growth rates higher than the overall market. That still leaves about $17 billion in revenue up for grabs by smaller, boutique cloud providers and specialized vendors.

These companies operate at massive scale and because they enjoy widespread familiarity, often do not compete well on price or service. Specialized MSP cloud providers like Technolify are surfacing as competitors able to offer better pricing and service when compared to the big-box cloud providers.

The top three cloud companies all have their own strengths and weaknesses. AWS is the most established player and boasts immense infrastructure based on Amazon’s own needs for supporting seasonal buying habits. Microsoft Azure is now a core element of Microsoft’s overall business strategy, and their suite of business software and support products makes them a familiar name among corporations. Google Cloud is the smallest of the three, but it’s hard to underestimate what this tech giant can accomplish when it comes to growth.

Cloud outages are a real possibility. Such outages can be caused by a local-level event like a power or internet outage.

It’s also possible for the big cloud vendors have outages due to cyberattack or large-scale equipment failures. Although this is rare, it can happen.