What is cloud computing?

Cloud computing, often referred to as simply “the cloud,” is the delivery of on-demand computing resources — everything from applications to data centers — over the internet on a pay-for-use basis.

  • Elastic resources: Scale up or down quickly and easily to meet changing demand.
  • Metered services: Pay only for what you use.
  • Self-service: Find all the IT resources you need, with self-service access.

A brief history of cloud computing

Cloud computing dates back to the 1950s, and over the years, it has evolved through many phases that were first pioneered by IBM, including grid, utility and on-demand computing.

To read a full history of cloud computing, from mainframes to how virtualization introduced the modern-day cloud, check out IBM’s history of cloud computing blog post.

Pros and cons of cloud computing

While the term “cloud” may seem abstract, the benefits of cloud computing to customers are very real and tangible. IBM — as well as its clients around the world — is adopting cloud computing in recognition of its potential to usher in a new era of responsiveness, effectiveness and efficiency in IT service delivery.

As the cloud has gained popularity and acceptance in the computing world, more and more businesses are making the switch. In fact, 75 percent of existing non-cloud apps will move to the cloud within the next three years.

Cloud computing benefits continuously evolve with the addition of new services, the conducting of uncompromising research and the creation of innovations that relentlessly push the boundaries of the underlying technology and architecture.

Seven benefits of cloud from an enterprise architecture standpoint:

  • Cost efficiency
  • Choice
  • Scale: flexibility and elasticity
  • Speed
  • Integration
  • Audit and compliance
  • Business continuity planning

While cloud computing brings great opportunity, it can also introduce challenges for business leaders and IT departments. By far, the most common disadvantages that continue to taint perceptions about cloud computing are security problems and inconsistent performance.

The good news is that these challenges can be overcome with a cloud architecture built specifically for your workloads and through the efforts of a strong, reliable cloud service provider.

Read the full recap of the pros and cons of cloud computing.

Cloud computing types

Platform as a service (PaaS)

Platform as a service provides a cloud-based environment with everything required to support the complete lifecycle of building and delivering web-based (cloud) applications — all without the cost and complexity of buying and managing the underlying hardware, software, provisioning and hosting.

Benefits of PaaS:

  • Develop application and get to market faster
  • Deploy new web applications to the cloud in minutes
  • Reduce complexity with middleware as a service

Infrastructure as a service (IaaS)

Infrastructure as a service provides companies with computing resources — including servers, networking, storage and data-center space — on a pay-per-use basis.

Benefits of IaaS:

  • No need to invest in your own hardware
  • Infrastructure scales on demand to support dynamic workloads
  • Flexible, innovative services available on demand

Software as a service (SaaS)

Cloud-based applications — or software as a service — run on distant computers “in the cloud” that are owned and operated by others and that connect to users’ computers via the internet and (usually) a web browser.

Benefits of SaaS:

  • You can sign up and rapidly start using innovative business apps
  • Apps and data are accessible from any connected computer
  • No data is lost if your computer breaks, because the data is in the cloud
  • The service is able to dynamically scale to usage needs

Learn more about the top five advantages of SaaS

Cloud computing deployment models

The various types of cloud computing deployment models include public cloud, private cloud, hybrid cloud and multicloud.

Public cloud

Public clouds are owned and operated by companies that offer rapid access over a public network to affordable computing resources. With public cloud services, users don’t need to purchase hardware, software or supporting infrastructure, all of which is owned and managed by providers.

Key aspects of public cloud:

  • Gives access to innovative SaaS business apps for applications ranging from customer resource management (CRM) to transaction management and data analytics
  • Allows for flexible, scalable IaaS for storage and compute services at a moment’s notice
  • Enables powerful PaaS for cloud-based application development and deployment environments

Private cloud

A private cloud is infrastructure operated solely for a single organization, whether managed internally or by a third party, and hosted either internally or externally. Private clouds can take advantage of cloud’s efficiencies while providing more control of resources and allowing clients to steer clear of multitenancy.

Key aspects of private cloud:

  • Gives self-service interface controls services, allowing IT staff to quickly provision, allocate and deliver on-demand IT resources
  • Facilitates highly automated management of resource pools for everything from compute capability to storage, analytics and middleware
  • Provides sophisticated security and governance designed for a company’s specific requirements

Hybrid cloud

A hybrid cloud uses a private cloud foundation combined with the strategic integration and use of public cloud services. The reality is that a private cloud can’t exist in isolation from the rest of a company’s IT resources and the public cloud. Most companies with private clouds will evolve to manage workloads across data centers, private clouds and public clouds, thereby creating hybrid clouds.

Key aspects of hybrid cloud:

  • Allows companies to keep critical application and sensitive data within a traditional data center environment or private cloud
  • Enables taking advantage of public cloud resources like SaaS for the latest applications and IaaS for elastic virtual resources
  • Facilitates portability of data, apps and services and more choices for deployment models


Many businesses employ various cloud services to drive innovation and aid business agility, such as creating new revenue streams, adding products and services and increasing margins. Because of such wide-ranging and valuable potential advantages, multicloud environments are essential to survival and success in the digital era.

Key aspects of multicloud:

  • Eighty-five percent of companies are already operating in multicloud environments. Adding to the complexity, the majority of these environments are comprised of multiple hybrid clouds. Hybrid clouds can connect one or more public, private or hybrid clouds to on-premise systems and can network one or more clouds to other clouds.
  • Seventy-six percent of organizations report they are already using at least 2 to 15 hybrid clouds, and 98 percent forecast they will be using multiple hybrid clouds within three years.

Security issues in cloud computing

Your cloud infrastructure is only as secure as you make it. Responsibility for securing the cloud lies not only with security teams, but also with DevOps and operations teams that are charged with ensuring appropriate security controls are used. Businesses are eager to bring more regulated workloads to the cloud, including any application that manages or contains personal identifying information, financial information or healthcare information.

To avoid cloud computing risks, a cloud managed services provider should incorporate built-in security layers at every level — from the data center to the operating system — delivering a fully configured solution with industry-leading physical security and regular vulnerability scans performed by highly skilled specialists.

Cloud computing for the enterprise

Enterprises eager to undergo digital transformations and modernize their applications are quick to see the value of adopting a cloud computing platform. They are increasingly finding business agility or cost savings by renting software. Each cloud computing service and deployment model type provides you with different levels of control, flexibility and management. Therefore, it’s important to understand the differences between them.

Common convention points to public cloud as the delivery model of choice; but, when considering the right architecture of cloud computing for your applications and workloads, you must begin by addressing the unique needs of your business.

This can include many factors, such as government regulations, security, performance, data residency, service levels, time to market, architecture complexity, skills and preventing vendor lock-in. Add in the need to incorporate the emerging technologies, and you can see why IT leaders are challenging the notion that cloud computing migration is easy.

At first glance, the types of cloud computing seem simple: public, private or a hybrid mix of both. In reality, the choices are many. Public cloud can include shared, dedicated and bare metal delivery models. Fully and partially managed clouds are also options. And, in some cases, especially for existing applications where architectures are too complex to move or the cost-benefit ratio is not optimal, cloud may not be the right choice.

The right model depends on your workload. You should understand the pluses and minuses of each cloud deployment model and take a methodical approach to determining which workloads to move to which type of cloud for the maximum benefit.

Dive deeper into specific cloud service and deployment models, cloud computing architecture and cloud computing examples

Cloud computing storage

Storage growth continues at a significant rate, driven by new workloads like analytics, video and mobile applications. While storage demand is increasing, most IT organizations are under continued pressure to lower the cost of their IT infrastructure through the use of shared cloud computing resources. It’s vital for software designers and solution architects to match the specific requirements of their workloads to the appropriate storage solution or, in many enterprise cases, a mix.

One of the biggest advantages of cloud storage is flexibility. A company that has your data or data you want will be able to manage, analyze, add to and transfer it all from a single dashboard — something impossible to do today on storage hardware that sits alone in a data center.

The other major benefit of storage software is that it can access and analyze any kind of data wherever it lives, no matter the hardware, platform or format. So, from mobile devices linked to your bank to servers full of unstructured social media information, data can be understood via the cloud.

Cloud computing pricing

Like any other business-critical decision, selecting a cloud service requires due diligence and research beyond published per-unit rates. It requires an in-depth understanding of workload performance characteristics and needs and the ability to match those needs to the actual offerings of multiple cloud vendors.

Cloud service providers have no shared standard “units” for cloud capacity or common pricing structures, nor are there common specifications for the underlying hardware that runs the cloud applications. As a result, an assumption of total workload cost based on a provider’s basic “per unit” rate can easily be off by orders of magnitude.

10 tips for enterprise cloud procurement

  • Do your homework. Don’t assume that the provider that’s currently in the news with price decreases will be the best-priced provider for your workload.
  • Understand all workload requirements that will impact cloud workload costs and operations (not just compute and storage). Consider costs associated with licensing software for each core, data transfer to the internet or private network and persistent storage.
  • Understand how the provider will support geographically-dispersed workloads. If your application must move data throughout the globe, ensure that the provider not only has data centers in the regions where you do business, but also a high-performance, private global network. Also consider whether the provider charges data transfer fees between and among cloud centers — any such fees can considerably add to costs if your company expands globally.
  • Consider your business requirements, including the “agility” tradeoff. Can you afford to lock in to a specific provider, unit type, volume or time frame, even if it means a discount?
  • Consider the “net present value of money” when you evaluate long-term pricing options. Seek input from your finance department, especially if you are considering an upfront payment option. This will ensure your comparisons are valid and adhere to your company’s accounting rules for net present value.
  • Factor in the non-workload-specific costs your business will need to run the workload optimally, including technical support, engineering and even professional services.
  • Allow for changing workload needs. You should be able to move workloads as needed from, for example, bare metal to virtualized servers without a major effort.
  • Consider the big picture. Each cloud workload should fit into a holistic cloud strategy, one that will likely comprise multiple deployment models, geographies and vendors.
  • Even as you consider price performance based on the individual cloud workload, consider the provider’s ability to support your broader hybrid IT strategy via OpenStack-compatible platforms, integrated solutions and seamless migration across models.
  • Finally, don’t just look at price for the workload. Instead, consider price-performance to be your base unit of comparison as you consider cloud options or any type of IT option.

Use the cloud pricing calculator to get an idea of your workload costs

The future of cloud

Within the next three years, 75 percent of existing non-cloud apps will move to the cloud. Today’s computing landscape shows companies not only adopting cloud but using more than one cloud environment. Even then, the cloud journey for many has only just begun, moving beyond low-end infrastructure as a service to establish higher business value.

Review five cloud predictions for 2018 and see which forecasts panned out.