We can’t tell you how often our new clients ask this question. Cloud computing services came on the scene nearly ten years ago, but many business owners and managers still don’t understand how they work.

How does cloud computing work?

Cloud computing is the delivery of computing services over the Internet. You can move your entire IT infrastructure to the Cloud including your servers, data storage, databases, networking solutions, software, analytics, and more. Cloud providers usually charge for their services on a per-user basis, so you don’t have to pay upfront like you would for a new server or other computing equipment. It’s much like paying for a subscription although you can scale up or down at any time. If you decide to hire more employees, you can. Or vice versa–if you decide to let some folks go, you simply tell the cloud provider you don’t need as many “seats.” Cloud computing services are all a bit different, but most provide a user-friendly environment that can meet most any business’s needs.

What are the benefits of cloud computing?

Cloud computing provides many benefits including cost savings, efficiency, and speed. It’s deployed via a public, private, or hybrid cloud. Cloud services benefit small companies as they can compete with larger organizations by scaling their IT infrastructure rather than being tied down to on-premise servers and storage.

Organizations are divesting from the use of onsite servers and using cloud computing. Many small businesses, including most of our clients, are moving their IT to the Cloud. According to Microsoft, there are 6 reasons for this:

  1. Cost: Cloud computing eliminates the capital expense of buying hardware and software to run data centers.
  2. Speed: Computing resources can be provisioned within minutes.
  3. Scale: You can have just the right amount of resources from wherever you are.
  4. Productivity: There’s no need to set up hardware, patch software or manage other time-consuming tasks. As a result, this increases the productivity of your employees, and they can concentrate on their core responsibilities.
  5. Performance: Cloud services are updated on a regular basis to the latest generation of fast and efficient computing hardware. This offers benefits over a single corporate data center, including greater economies of scale and reduced network latency for applications.
  6. Reliability: Cloud computing makes data backup, disaster recovery, and business continuity easier and less expensive since data can be mirrored from multiple sites on the cloud provider’s network.

There are 3 ways that cloud services are deployed.

Public Cloud

Public clouds are owned and operated by a cloud service provider. They offer resources like storage, computational services, and servers via the Internet. The public cloud provides access to IT resources on a “pay as you go” billing basis. Your cloud service provider manages your core IT infrastructure, so you don’t have to.

Private Cloud

With a private cloud, your services and infrastructure are maintained on a private network. A private cloud would be exclusive to your organization. It can be physically located in your on-site datacenter. Many companies that use a private cloud pay a service provider to host their private cloud. The way services are delivered is much the same as a private cloud (on a pay-as-you-go basis). However, the services you access are provided behind a firewall and are only accessible to those you authorize. With a private cloud, you can take advantage of the virtualization and centralization without the worries of security issues that could arise when using a public cloud.

Hybrid Cloud

A hybrid cloud is a combination of private and public clouds. Data and applications are shared between them. A hybrid cloud provides greater flexibility and more deployment options. Plus, a hybrid cloud can integrate your in-house IT infrastructure with other services and solutions to meet your business’s unique needs.

There are three main types of cloud service.

  1. Infrastructure-as-a-Service (IaaS) delivers an IT infrastructure on an outsourced basis and provides hardware, storage, servers, data center space, and software if needed. IaaS is also known as hardware as a service (HaaS). It’s used on-demand rather than having to purchase your own equipment. This would be a wise choice if there’s a fluctuating demand for your products or services. You don’t have to expend the capital to invest in new hardware. Your IaaS provider offers policy-based services and takes responsibility for housing, operating and maintaining the equipment on a per-user basis.
  2. Platform-as-a-Service (PaaS) is a computing platform that’s delivered as an integrated solution, solution stack or service. This could be a set of components or software for developing a product or service like a web application that uses an operating system, a database, and programming language. PaaS evolved from Software as a Service (SaaS). It allows you to rent virtualized servers and services to run existing applications or to design, develop, test, deploy and host applications. Services include source code control and tracking, versioning, testing and build process management tools. Essentially, it provides a platform for you to develop, run, and manage applications without having to build and maintain the infrastructure needed to launch an application.
  3. Software-as-a-Service (SaaS) SaaS provides software applications over the Internet on a subscription basis. Your cloud provider would host and manage the software and underlying infrastructure. They also take care of maintenance such as software upgrades and security patching. SaaS is a growing method of delivering technology and is relied upon by businesses for customer relationship management (CRM), document management, accounting, human resource (HR) management, service desk management, content management and collaboration.

Here’s the problem with onsite servers.

  1. On-premise servers and equipment need monitoring, and this can get expensive. You need to dedicate a member of your staff to manage the system which also costs time and money.
  2. It’s more difficult to work remotely, and if you want “offsite access” it’s not easy to set up and can be expensive. When your IT systems are located onsite, and you have employees who need to work at home or when traveling, access to your system isn’t always available and can be costly to set up.
  3. Security is always an issue and can’t be guaranteed. With onsite servers, you need a variety of devices with USB connections. Think about this. How easy would it be for someone to slip a thumb drive into one of your workstations and steal your data? Some have open wireless access to their network where anyone could sit outside the office and log in to steal data. These are serious security risks.

For these and other reasons, more businesses are using cloud services rather than onsite servers, and this is expected to increase.