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What is cloud storage?

Cloud storage allows you to save data and files in an offsite location that you can access either through the public internet or a dedicated private network connection.

The data that you transfer off-site for storage becomes the responsibility of a third-party cloud provider. The provider hosts, secures, manages and maintains the servers and associated infrastructure and ensures you have access to the data whenever you need it.

Cloud storage delivers a cost-effective, scalable alternative to storing files on on-premises hard disk drives or storage networks. Computer hard disk drives can only store a finite amount of data. When users run out of storage, they need to transfer files to an external storage device.

Traditionally, organizations built and maintained storage area networks (SANs) to archive data and files. However, sANs are expensive to maintain because as stored data grows, companies must invest in adding servers and infrastructure to accommodate increased demand.

Cloud storage services provide elasticity, which means you can scale capacity as your data volumes increase or dial down capacity if necessary. By storing data in a cloud, your organization saves by paying for storage technology and capacity as a service, rather than investing in the capital costs of building and maintaining in-house storage networks.

You pay for only exactly the capacity you use. While your costs might increase over time to account for higher data volumes, you don’t have to overprovision storage networks in anticipation of increased data volume.

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How does cloud storage work?

Like on-premises storage networks, cloud storage uses servers to save data; however, the data is sent to servers at an off-site location. Most of the servers you use are virtual machines hosted on a physical server. As your storage needs increase, the provider creates new virtual servers to meet demand.

Typically, you connect to the storage cloud either through the internet or a dedicated private connection, using a web portal, website or a mobile app. The server that you use to connect forwards your data to a pool of servers located in one or more data centers, depending on the size of the cloud provider’s operation.

As part of the service, providers typically store the same data on multiple machines for redundancy. This way, if a server is taken down for maintenance or suffers an outage, you can still access your data.

Cloud storage is available in private, public and hybrid clouds.

Public storage clouds: In this model, you connect over the internet to a storage cloud that’s maintained by a cloud provider and used by other companies. Providers typically make services accessible from just about any device, including smartphones and desktops and let you scale up and down as needed.

Private cloud storage: Private cloud storage setups typically replicate the cloud model, but they reside within your network, leveraging a physical server to create instances of virtual servers to increase capacity.

You can choose to take full control of an on-premise private cloud, or engage a cloud storage provider to build a dedicated private cloud that you can access with a private connection. Organizations that might prefer private cloud storage include banks or retail companies due to the private nature of the data they process and store.

Hybrid cloud storage: This model combines elements of private and public clouds, giving organizations a choice of which data to store in which cloud. For instance, highly regulated data subject to strict archiving and replication requirements is usually more suited to a private cloud environment, whereas less sensitive data (such as email that doesn’t contain business secrets) can be stored in the public cloud. Some organizations use hybrid clouds to supplement their internal storage networks with public cloud storage.

Pros and cons of cloud storage

As with any other cloud-based technology, cloud storage offers some distinct advantages. But it also raises some concerns for companies, primarily over security and administrative control.


  • Off-site management: Your cloud provider assumes responsibility for maintaining and protecting the stored data. This frees your staff from tasks associated with storage, such as procurement, installation, administration and maintenance. As such, your staff can focus on other priorities.

  • Quick implementation: Using a cloud service accelerates the process of setting up and adding to your storage capabilities. With cloud storage, you can provision the service and start using it within hours or days, depending on how much capacity is involved.

  • Cost-effective: As mentioned, you pay for the capacity you use. This allows your organization to treat cloud storage costs as an ongoing operating expense instead of a capital expense with the associated upfront investments and tax implications.

  • Scalability: Growth constraints are one of the most severe limitations of on-premises storage. With cloud storage, you can scale up as much as you need. Capacity is virtually unlimited.

  • Business continuity: Storing data offsite supports business continuity in the event that a natural disaster or terrorist attack cuts access to your premises.


  • Security: Security concerns are common with cloud-based services. Cloud storage providers try to secure their infrastructure with up-to-date technologies and practices, but occasional breaches have occurred, creating discomfort with users.

  • Administrative control: Being able to view your data, access it and move it at will is another common concern with cloud resources. Offloading maintenance and management to a third party offers advantages but can limit your control over your data.

  • Latency: Delays in data transmission to and from the cloud can occur as a result of traffic congestion, especially when you use shared public internet connections. However, companies can minimize latency by increasing connection bandwidth.

  • Regulatory compliance: Certain industries, such as healthcare and finance, must comply with strict data privacy and archival regulations, which might prevent companies from using cloud storage for certain types of files, such as medical and investment records. If you can, choose a cloud storage provider that supports compliance with any industry regulations impacting your business.
Types of cloud storage

There are three main types of cloud storage: file, block and object. Each offers its own advantages.

File storage

File storage saves data in the hierarchical file and folder structure with which most of us are familiar. The data retains its format, whether residing in the storage system or in the client where it originates, and the hierarchy makes it easier and more intuitive to find and retrieve files when needed. File storage is commonly used for development platforms, home directories and repositories for video, audio and other files.

Learn more about file storage

Block storage

Traditionally employed in SANs, block storage is also common in cloud storage environments. In this storage model, data is organized into large volumes called “blocks". Each block represents a separate hard disk drive. Cloud storage providers use blocks to split large amounts of data among multiple storage nodes.

Block storage resources provide better performance over a network thanks to low IO latency (the time that it takes to complete a connection between the system and client) and are especially suited to large databases and applications.

Used in the cloud, block storage scales easily to support the growth of your organization’s databases and applications. Block storage would be useful if your website captures large amounts of visitor data that needs to be stored.

Learn more about block storage

Object storage

Object storage differs from file and block storage in that it manages data as objects. Each object includes the data in a file, its associated metadata and an identifier. Objects store data in the format that it arrives in and makes it possible to customize metadata in ways that make the data easier to access and analyze.

Instead of being organized in files or folder hierarchies, objects are kept in repositories that deliver virtually unlimited scalability. Since there is no filing hierarchy and the metadata is customizable, object storage allows you to optimize storage resources in a cost-effective way.

Learn more about object storage

Cloud storage for business

Various cloud storage services are available for just about every kind of business—anything from sole proprietor to large enterprises.

If you run a small business, cloud storage might make sense, particularly if you don’t have the resources or skills to manage storage yourself. Cloud storage can also help with budget planning by making storage costs predictable, and it gives you the ability to scale as the business grows.

If you work at a larger enterprise (for example, a manufacturing company, financial services or a retail chain with dozens of locations), you might need to transfer hundreds of gigabytes of data for storage regularly. In these cases, you should work with an established cloud storage provider that can handle your volumes. Sometimes, you can negotiate custom deals with providers to get the best value.


Cloud storage security is a serious concern, especially if your organization handles sensitive data like credit card information and medical records. You want assurances that your data is protected from cyberthreats with the most up-to-date methods available.

You want layered security solutions that include endpoint protection, content and email filtering and threat analysis, as well as best practices that comprise regular updates and patches. And you need well-defined access and authentication policies.

Most cloud storage providers offer baseline security measures that include access control, user authentication and data encryption. Ensuring these measures are in place is especially important when the data in question involves confidential business files, personnel records and intellectual property. Data subject to regulatory compliance might require added protection, so you need to check that your provider of choice complies with all applicable regulations.

Whenever data travels, it is vulnerable to security risks. You share the responsibility for securing data headed for a storage cloud. Companies can minimize risks by encrypting data in motion and by using dedicated private connections (instead of the public internet) to connect with the cloud storage provider.


Data backup is as important as security. Businesses need to back up their data so they can access copies of files and applications—and prevent interruptions to business—if data is lost due to cyberattack, natural disaster or human error.

Cloud-based data backup and recovery services have been popular from the early days of cloud-based solutions. Much like cloud storage itself, you access the service through the public internet or a private connection. Cloud backup and recovery services free organizations from the tasks involved in regularly replicating critical business data to make it readily available should you ever need it in the wake of data loss caused by a natural disaster, cyberattack or unintentional user error.

Cloud backup offers the same advantages to businesses as storage—cost-effectiveness, scalability and easy access. One of the most attractive features of cloud backup is automation. Asking users to continually back up their own data produces mixed results since some users always put it off or forget to do it. This creates a situation where data loss is inevitable. With automated backups, you can decide how often to back up your data, be it daily, hourly or whenever new data is introduced to your network.

Backing up data off-premise in a cloud offers an added advantage: distance. A building struck by a natural disaster, terror attack or some other calamity might lose its on-premise backup systems, making it impossible to recover lost data. Off-premise backup provides insurance against such an event.


Cloud storage servers are virtual servers—software-defined servers that emulate physical servers. A physical server can host multiple virtual servers, making it easier to provide cloud-based storage solutions to multiple customers. The use of virtual servers boosts efficiency because physical servers otherwise typically operate below capacity, which means some of their processing power is wasted.

This approach is what enables cloud storage providers to offer pay-as-you-go cloud storage, and to charge only for the storage capacity you consume. When your cloud storage servers are about to reach capacity, the cloud provider spins up another server to add capacity—or makes it possible for you to spin up an additional virtual machine on your own.

Open-source cloud storage

If you have the expertise to build your own virtual cloud servers, one of the options available to you is open source cloud storage. Open source means the software used in the service is available to users and developers to study, inspect, change and distribute.

Open-source cloud storage is typically associated with Linux and other open source platforms that provide the option to build your own storage server. Advantages of this approach include control over administrative tasks and security.

Cost-effectiveness is another plus. While cloud-based storage providers give you virtually unlimited capacity, it comes at a price. The more storage capacity that you use, the higher the price gets. With open source, you can continue to scale capacity as long as you have the coding and engineering expertise to develop and maintain a storage cloud.

Different open source cloud storage providers offer varying levels of functionality, so you should compare features before deciding which service to use. Some of the functions available from open source cloud storage services include:

  • Syncing files between devices in multiple locations

  • Two-factor authentication

  • Auditing tools

  • Data transfer encryption

  • Password-protected sharing
Cloud storage pricing

As mentioned, cloud storage helps companies cut costs by eliminating in-house storage infrastructure. But cloud storage pricing models vary. Some cloud storage providers charge monthly the cost per gigabyte, while others charge fees based on stored capacity.

Fees vary widely as you might pay USD 1.99 or USD 10 for 100 GB of storage monthly, based on the provider you choose. Additional fees for transferring data from your network to the fees based on cloud storage are usually included in the overall service price.

Providers might charge extra fees on top of the basic cost of storage and data transfer. For instance, you might incur an extra fee every time you access data in the cloud to make changes or deletions, or to move data from one place to another. The more of these actions you perform on a monthly basis, the higher your costs will be. Even if the provider includes some base level of activity in the overall price, you incur extra charges if you exceed the allowable limit.

Providers might also factor the number of users accessing the data, how often users access data and how far the data must travel into their charges. They might charge differently based on the types of data stored and whether the data requires added levels of security for privacy purposes and regulatory compliance.


Cloud storage services are available from dozens of providers to suit all needs, from those of individual users to multinational organizations with thousands of locations. For instance, you can store emails and passwords in the cloud, as well as files like spreadsheets and Word documents for collaborating with other users. This capability makes it easier for users to work together on a project, which explains why file transfer and sharing are among the most common uses of cloud storage services.

Some services provide file management and syncing, ensuring that versions of the same files in multiple locations are updated whenever someone changes them. You can also get file management capability through cloud storage services. With it, you can organize documents, spreadsheets and other files as you see fit and make them accessible to other users. Cloud storage services can also handle media files, such as video and audio, as well as large volumes of database records that would otherwise take up too much room inside your network.

Whatever your storage needs, you should have no trouble finding a cloud storage service to deliver the capacity and functionality you need.

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