Public cloud adoption has soared since the launch of the first commercial cloud two decades ago. Most of us take for granted the countless ways public cloud-related services—social media sites (Instagram), video streaming services (Netflix), web-based email applications (Gmail), and more—permeate our lives.

In the business sphere, both large enterprises and small startups depend on public cloud computing models to provide the flexibility, cost-effectiveness and scalability needed to fuel business growth. According to an International Data Corporation (IDC) report (link resides outside ibm.com), worldwide spending on public cloud provider services will reach $1.35 trillion in 2027. 

Here, we explore 10 top business use cases that reveal how a public cloud helps form the foundation for modern business and fuels ongoing digital transformation. 

What is a public cloud?

A public cloud is a type of cloud computing in which a third-party service provider (e.g., Amazon Web Services (AWS), Google Cloud Platform, IBM Cloud or Microsoft Azure) makes computing resources (e.g., ready-to-use software applications, virtual machines (VMs), enterprise-grade infrastructures and development platforms) available to users over the public internet on a pay-per-usage basis. Moreover, a public cloud model enables companies to automatically scale compute and storage resources up or down (along with data security measures and services) to meet their individual needs. 

How does public cloud computing work? 

In a public cloud computing model, a cloud service provider (CSP) owns and operates vast physical data centers that run client workloads. Public cloud environments are multi-tenant, where users share a pool of virtual resources automatically provisioned for and allocated to individual tenants through a self-service API interface. Multi-tenant hosting allows cloud service providers to maximize utilization of their data centers and infrastructure resources to offer services at much lower costs than a company-owned, on-premises data center.

Cloud service providers are also responsible for all hardware maintenance and for providing high-bandwidth network connectivity to ensure rapid access and exchange of applications and data. They also manage the underlying virtualization of servers, operating system software networking and other infrastructure that power a public cloud data center and maximize data center resources. For instance, with virtualization, one physical server can be split into multiple, distinct virtual servers that serve different clients.

All major public cloud providers continuously update and maintain their infrastructure and leverage the highest data protection and security requirements to prevent data breaches. 

Additionally, they offer numerous cloud security tools and solutions like identity and access management (IAM), data loss prevention (DLP), and security information and event management (SIEM).

Finally, a service level agreement (SLA) defines the relationship between a CSP and a client and covers the performance, availability and manageability of cloud services.

Public cloud service models

Today’s cloud providers offer hundreds of managed services and tools across four main categories. These services are not mutually exclusive; most large organizations use all four to create a modern IT cloud computing environment.

• Software-as-a-Service (SaaS) is on-demand access to ready-to-use, cloud-hosted application software.
• Platform-as-a-Service (PaaS) is a complete cloud platform—hardware, software and infrastructure—for developing, running and managing applications. 
• Infrastructure-as-a-Service (IaaS) is a cloud computing model that delivers fundamental compute, network and storage resources. 
• Serverless computing (serverless) is a cloud computing model that offloads all the back-end infrastructure management tasks—including provisioning, scaling, scheduling and patching—to the cloud provider.

Benefits of a public cloud

The following are some of the benefits that organizations can enjoy if they employ a public cloud solution:

• Cost-effectiveness: Reduce spending on hardware and on-premises infrastructures with pay-per-usage or subscription pricing models.
• Efficiency: Eliminate wasted resources by paying only for what you use. 
• Elasticity: Automatically add capacity in response to unexpected surges in traffic (e.g., e-commerce flash sales). 
• Scalability: Effectively increase workloads by upgrading the capabilities of existing resources (scaling up) or incorporating additional resources to share the load (scaling out). 
• Innovation: Access cutting-edge technologies (e.g., artificial intelligence (AI), edge computing, the Internet of Things (IoT)).
• Spending predictability: Experience more predictable ongoing operating expenses to achieve lower costs for overall IT spending.
• Team collaboration: Access public cloud resources from anywhere and allow teams to communicate with each other across distributed locations in real time for faster outcomes.
• High availability and reliability: Achieve less downtime and ensure data resilience with automatic backup and disaster recovery.
• Sustainability: Enhance energy efficiency through pooled CSP resources to reduce your carbon footprint.

Public cloud vs. private cloud vs. hybrid cloud vs. multicloud

Beyond the public cloud, cloud deployment models include private cloud, hybrid cloud and multicloud, each offering unique advantages. 

A private cloud refers to a single-tenant cloud infrastructure operated exclusively for one company that is hosted on-premises at a company’s physical location. A dedicated cloud provider or third-party infrastructure can also host a private cloud. Private clouds are ideal settings for organizations in industries with sensitive data—like those in finance, government or healthcare—that require stringent regulatory or security requirements. 

A hybrid cloud model uses a mix of computing environments (e.g., on-premises, private cloud, public cloud) to create a single, flexible managed IT infrastructure. 

Today, businesses typically combine a hybrid cloud environment with multicloud—the use of public cloud services from multiple providers. A multicloud approach helps organizations avoid vendor lock-in and select the best cloud services to meet their needs.

A hybrid multicloud has become the de facto choice for large enterprises, giving them the most control over where workloads are deployed and scaled. 

The top public cloud use cases

Here are 10 ways businesses leverage public cloud computing services to achieve cost savings, innovation and overall business growth. 

1. Storage

Public cloud storage consists of storage capacity and technology as-a-service, which helps organizations reduce or eliminate the capital costs of building and maintaining in-house storage capabilities. By storing the same company data on multiple machines, cloud storage offers the redundancy needed to support business continuity in the face of a natural disaster, an outage or other emergencies.

2. Dynamic resource allocation

A public cloud gives companies the elasticity to scale resources up or down depending on business needs. For instance, an e-commerce site with highly seasonal sales can quickly expand its online services with a public cloud. They only pay for added capacity during peak periods and then can scale back down during regular sales.

3. Development and testing

A public cloud setting offers an ideal environment for developing and testing new applications compared to the traditional waterfall method, which can be far costlier and more time-consuming. For instance, in just minutes, developers can provision testing environments on public cloud-based virtual machines (VMs). When developers finish using a testing environment, they can easily take it down.

4. Cloud-native applications and DevOps

A public cloud setting supports cloud-native applications—software programs that consist of multiple small, interdependent services called microservices, a crucial part of DevOps practices. Developers use DevOp tools to automate cloud-native development and rapid delivery of high-quality software, building containerized applications once and deploying them anywhere.

5. Low code

Low code is a visual approach to software featuring a graphical user interface with drag-and-drop features that support the automation of the development process. Low-code platforms democratize app development for “citizen” developers—users with little formal coding experience. Low code helps businesses streamline workflows and accelerate the development of websites and mobile apps, the integration of external plugins, and cloud-based next-gen technologies, like artificial intelligence (AI) and machine learning (ML).

6. Analytics

With the rise of data collected from mobile phones, the Internet of Things (IoT), and other smart devices, companies need to analyze data more quickly than ever before. Big data analytics—the use of advanced analytic techniques against very large, diverse big data sets—has become crucial to business success. A public cloud environment provides the computing and networking infrastructure needed to support big data so companies can make faster data-driven decisions and deliver better customer experiences in real-time and at scale.

7. Hybrid multicloud strategy

A public cloud is pivotal to a hybrid multicloud strategy. By integrating public cloud services with private cloud or on-premises infrastructure, organizations can choose where to run workloads and select the best services from different CSPs. For instance, a financial institution may want to use the public cloud to test and develop new applications while deploying workloads sensitive to fraud and subject to regulation on a private cloud hosted by a dedicated CSP.

8. Generative AI

With its massive need for compute, storage and networking capabilities, generative AI needs the cloud to process data in real-time and at scale. Public cloud providers offer companies the capability to access data and harness processing power from multiple distributed data centers that can support generative AI workloads.

9. Edge computing

Edge computing brings enterprise applications closer to data sources (e.g., mobile phones, sensors, IoT, devices or local edge servers) for faster insights, improved response times and better bandwidth. For instance, edge devices help monitor power grid operations to reduce energy waste in the energy sector. A public cloud works synergistically with edge services by connecting them to a centralized public cloud or other edge data centers. Most often, only the most relevant data is processed at the edge. In contrast, less critical data is sent to a primary public cloud data center for processing, freeing up computing resources to ensure low latency.

10. Quantum computing

Quantum computing uses computer hardware, algorithms and other quantum mechanics technology to solve complex problems. While quantum computing for business is still in its early stages, organizations in industries that require vast computing capabilities (e.g., chemistry, biology, healthcare, finance) are beginning to tap into quantum’s potential to transform the way they do business. Today’s public cloud service providers have started to offer services involving renting quantum machines, platforms for developing utility-scale quantum algorithms and applications and more. 

Public cloud solutions with IBM

Harnessing all of a public cloud’s capabilities requires an enterprise-grade platform that can deliver a high-performance, secure and compliant cloud environment. Built to support the most mission-critical workloads, IBM Cloud is a full-stack cloud platform with over 170+ public cloud solutions to help clients mitigate third- and fourth-party risk, increase time to value, and lower cost of ownership (TCO).