Talking about the benefits of cloud computing, Cloud Expert, Lucy Thorpe from InCloud SolutionsOpens a new window, says, “Cloud technology is ideal for growing companies because it allows you to scale up your computing capacity as you grow — adding in extra users and opening up new functionality. So, for example, if a company buys a software in a box solution from a cloud service provider, they can start out by using the financials element to speed up basic accounting processes and then move on to other parts of the system such as HR, CRM, and Project Management.”
# What Is Cloud Computing? Definition, Benefits, Types, and Trends

Cloud computing touches us all. There’s an explosion of cloud-based applications and services. Click here to learn the basics of private, public, and hybrid cloud.

July 2, 2021

Cloud computing is defined as the use of hosted services, such as data storage, servers, databases, networking, and software over the internet. Since cloud computing began, the world has witnessed an explosion of cloud-based applications and services in IT, which continue to expand. Almost every application we use resides on the cloud, helping us save storage space, expenses, and time. This article discusses the types of cloud computing and 10 trends to watch out for.

## Table of Contents

## What Is Cloud Computing?

Cloud computing refers to the use of hosted services, such as data storage, servers, databases, networking, and software over the internet. The data is stored on physical servers, which are maintained by a cloud service provider. Computer system resources, especially data storage and computing power, are available on-demand, without direct management by the user in cloud computing.

Cloud Computing Architecture

Cloud Computing Architecture

Instead of storing files on a storage device or hard drive, a user can save them on cloud, making it possible to access the files from anywhere, as long as they have access to the web. The services hosted on cloud can be broadly divided into infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS). Based on the deployment model, cloud can also be classified as public, private, and hybrid cloud.

Further, cloud can be divided into two different layers, namely, front-end and back-end. The layer with which users interact is called the front-end layer. This layer enables a user to access the data that has been stored in cloud through cloud computing software.

The layer made up of software and hardware, i.e., the computers, servers, central servers, and databases, is the back-end layer. This layer is the primary component of cloud and is entirely responsible for storing information securely. To ensure seamless connectivity between devices linked via cloud computing, the central servers use a software called middlewareOpens a new window that acts as a bridge between the database and applications.

## Types of Cloud Computing

Cloud computing can either be classified based on the deployment model or the type of service. Based on the specific deployment model, we can classify cloud as public, private, and hybrid cloud. At the same time, it can be classified as infrastructure-as-a-service (IaaS), platform-as-a-service (PaaS), and software-as-a-service (SaaS) based on the service the cloud model offers.

Cloud Computing

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Types of Cloud Computing

### Private cloud

In a private cloud, the computing services are offered over a private IT network for the dedicated use of a single organization. Also termed internal, enterprise, or corporate cloud, a private cloud is usually managed via internal resources and is not accessible to anyone outside the organization. Private cloud computing provides all the benefits of a public cloud, such as self-service, scalability, and elasticity, along with additional control, security, and customization.

Private clouds provide a higher level of security through company firewalls and internal hosting to ensure that an organization’s sensitive data is not accessible to third-party providers. The drawback of private cloud, however, is that the organization becomes responsible for all the management and maintenance of the data centers, which can prove to be quite resource-intensive.

### Public cloud

Public cloud refers to computing services offered by third-party providers over the internet. Unlike private cloud, the services on public cloud are available to anyone who wants to use or purchase them. These services could be free or sold on-demand, where users only have to pay per usage for the CPU cycles, storage, or bandwidth they consume.

Public clouds can help businesses save on purchasing, managing, and maintaining on-premises infrastructure since the cloud service provider is responsible for managing the system. They also offer scalable RAM and flexible bandwidth, making it easier for businesses to scale their storage needs.

### Hybrid cloud

Hybrid cloud uses a combination of public and private cloud features. The “best of both worlds” cloud model allows a shift of workloads between private and public clouds as the computing and cost requirements change. When the demand for computing and processing fluctuates, hybrid cloudOpens a new window allows businesses to scale their on-premises infrastructure up to the public cloud to handle the overflow while ensuring that no third-party data centers have access to their data.

In a hybrid cloud model, companies only pay for the resources they use temporarily instead of purchasing and maintaining resources that may not be used for an extended period. In short, a hybrid cloud offers the benefits of a public cloud without its security risks.

Based on the service model, cloud can be categorized into IaaS (Infrastructure-as-a-Service), PaaS (Platform-as-a-Service), and SaaS (Software-as-a-Service). Let’s take a look at each one.

### Infrastructure as a service (IaaS)

Infrastructure as a service or IaaS is a type of cloud computing in which a service provider is responsible for providing servers, storage, and networking over a virtual interface. In this service, the user doesn’t need to manage the cloud infrastructure but has control over the storage, operating systems, and deployed applications.

Instead of the user, a third-party vendor hosts the hardware, software, servers, storage, and other infrastructure components. The vendor also hosts the user’s applications and maintains a backup.

### Platform as a service (PaaS)

Platform as a service or PaaS is a type of cloud computing that provides a development and deployment environment in cloud that allows users to develop and run applications without the complexity of building or maintaining the infrastructure. It provides users with resources to develop cloud-based applications. In this type of service, a user purchases the resources from a vendor on a pay-as-you-go basis and can access them over a secure connection.

PaaS doesn’t require users to manage the underlying infrastructure, i.e., the network, servers, operating systems, or storage, but gives them control over the deployed applications. This allows organizations to focus on the deployment and management of their applications by freeing them of the responsibility of software maintenance, planning, and resource procurement.

### Software as a service (SaaS)

SaaS or software as a service allows users to access a vendor’s software on cloud on a subscription basis. In this type of cloud computing, users don’t need to install or download applications on their local devices. Instead, the applications are located on a remote cloud network that can be directly accessed through the web or an API.

In the SaaS model, the service provider manages all the hardware, middleware, application software, and security. Also referred to as ‘hosted software’ or ‘on-demand software’, SaaS makes it easy for enterprises to streamline their maintenance and support.

## Key Benefits and Challenges for Enterprises

The most important reason why cloud computing is growing rapidly is the various benefits it offers. It saves businesses the time and resources required to set up full-fledged physical IT infrastructure. Let’s look at all the benefits cloud offers:

- Reduced costs: Maintaining IT systems requires big outlays of capital, something that cloud helps reduce. By using the resources provided by the cloud provider, businesses avoid the need to purchase expensive infrastructure, substantially reducing their expenditure. Cloud providers work on the pay-as-you-go model, which means businesses only pay for the services they use, further reducing costs.
- Scalability: Cloud allows organizations to grow their users from merely a few to thousands in a very short time. Depending on the need, a business can scale their storage needs up or down, allowing organizations to be flexible.
- Flexibility and collaboration: Since the data on cloud can be accessed directly via the internet, it gives employees the ability to work from anywhere, anytime. Cloud gives you the freedom to set up your virtual office anywhere you are. It also allows teams to work on a project across locations by giving them access to the same files as third-party vendors.
- Business continuity: Cloud safely stores and protects your data in the event of an outage or crisis. This makes it easier to resume work once the systems are up and running again.
- Competitive edge: Cloud takes care of various business aspects, such as maintaining the IT infrastructure, licensing software, or training personnel to manage your data. It, therefore, gives you an edge over your competitors since the time and resources you invest are minimal.

Talking about the benefits of cloud computing, Cloud Expert, Lucy Thorpe from InCloud SolutionsOpens a new window, says, “Cloud technology is ideal for growing companies because it allows you to scale up your computing capacity as you grow — adding in extra users and opening up new functionality. So, for example, if a company buys a software in a box solution from a cloud service provider, they can start out by using the financials element to speed up basic accounting processes and then move on to other parts of the system such as HR, CRM, and Project Management.”

Now let’s move on to discuss some challenges of cloud computing.

The biggest challenge of cloud computing is the security concerns associated with the technology. Although cloud service providers assure you of implementing the best security standards and industry certifications, there’s always a risk while storing your data on cloud.

- Downtime: Almost every cloud user will tell you that outages tops their list of cloud computing challengesOpens a new window. At times, cloud service providers may get overwhelmed due to the huge number of clients they provide services to each day. This may lead to technical outages, due to which your applications may temporarily experience some downtime.
- Internet connection dependency: A user may not be able to access the data on cloud without a good internet connection and a compatible device. Moreover, using public Wi-Fi to access your files could pose a threat if the right security measures are not taken.
- Financial commitment: Cloud providers use a pay-as-you-go pricing model. However, businesses need to give a monthly or annual financial commitment for most subscription plans. This needs to be factored into their operating costs.
- Security risks: Even if your cloud service provider promises you that they have the most reliable security certifications, there’s always a chance of losing your data. With hackers increasingly targeting cloud storage to gain access to sensitive business data, this might be an even greater concern, for which the appropriate measures need to be taken.
- Limited access: A user may have minimal control since the cloud service provider owns and manages the infrastructure. The user would only be able to manage applications and not the backend infrastructure. Crucial tasks, such as firmware management, may not be passed to the user at all. You always have to trust a third-party vendor to ensure security and take care of your data.

## Top 10 Cloud Computing Trends

Globally, cloud computing is a highly mature and steadily growing market. It was valued at $321 billionOpens a new window in 2019 (including all cloud types and service models) and is expected to reach $1025.9 billion in seven years. 2021 is a landmark year for cloud computing due to the accelerated pace of adoption in response to the COVID-19 pandemic. This has fueled new trends, focus areas, and opportunities.

### 1. Companies will spend more on public clouds in the wake of the pandemic

The public cloud has the fewest barriers to entry and is the most accessible for small businesses, startups, and independent professionals alike. For this reason, the public cloud segment is slated to grow by 18.4% in 2021, reaching a valuation of $304.9 billion as per Gartner estimates.

This includes software-as-a-service (SaaS), which occupies the largest market share, and platform-as-a-service (PaaS), which will grow the fastest. Distributed teams and the need for digital collaboration have increased demand for cloud computing and cloud-based applications, also extending to areas of IT operations through cloud-based cybersecurity, network management, and service provisioning.

### 2. Multi-cloud and hybrid cloud will help alleviate downtime worries

2020 and 2021 have been marked by several notable cloud outages, affecting some of the largest providers in the world. In March 2020, some of Azure’s North American customers faced a six-hour outage due to cooling system failure. Google’s cloud services were down several times last year, and, most recently in April, Microsoft faced another outage, affecting both Microsoft 365 and Azure. In 2021, companies will invest in multi-cloud and hybrid cloud strategies, along with cloud-agnostic platforms, to ensure greater IT resiliency.

### 3. Container technology will slowly but steadily gain in popularity

Containers offer an independent virtual environment to develop and run applications, regardless of the parent hosting environment (on-premise servers, cloud, or hybrid). Essentially, it allows companies to set up tiny, segregated clouds within their own infrastructure to improve their development capabilities.

In 2021, container adoption is slow, but there is significant interest and the promise of steady growth. Containers enable key benefits like application portability, a sandbox environment for secure testing, cost savings through more efficient hardware utilization, and support for CI/CD and DevOps pipelines.

### 4. Virtual desktops will become more commonplace and mainstream

Virtual desktop infrastructure (VDI) lets you stream the desktop image remotely without coupling the desktop with the physical client device. An important use case for VDI is remote worker productivity, as applications and services can be easily deployed to a remote client without any complex installation or configuration.

As WFH continues to be the norm in several geographies, VDI will see wider adoption even for non-technology use cases. Organizations can use it to scale workstations up or down at minimal capital expense – which is why cloud leader Microsoft is reportedly working on a new Cloud PC solution, an accessible VDI experience meant for business users.

### 5. Security technologies will evolve to become cloud-native and edge-first

A vital part of cloud evolution is the decentralization of remote hosting and processing through edge infrastructure. While cloud was already an area of focus for cybersecurity providers (as shared resources imply shared security risks), the edge is the next frontier.

This culminates in significant interest around secure access service edge (SASE) in 2021, covering the entire IT landscape across clouds, data centers, SaaS, and edge devices. Gartner reports that enterprise SASE adoption will take place over several years, and 2021 could be when you outline your strategic roadmap.

### 6. Communication and collaboration will be important cloud use cases

One of the first priorities after the large-scale shift to remote work in 2020 was the modernization of communication and collaboration channels. Cloud allows companies to connect remotely, facilitating both internal collaboration and external customer engagement. This isn’t limited to VoIP or cloud-based video conferencing alone.

Cloud-based tools allow for collaborative coding, collaborative document management, business intelligence collaboration, and a host of other productivity drivers. As a result, cloud-based communication and collaboration through unified-communication-as-a-service (UCaaS), contact-center-as-a-service (CCaaS), and communication-platform-as-a-service (CPaaS) will be top use cases in 2021.

### 7. Serverless computing will be an exciting adoption area, even outside of tech

Serverless architecture enables a type of enterprise IT design where code is modular and isolated. It is a cloud computing execution model where resources are provided as per real-time demand, assigned to each isolated module. Typically, serverless is limited to technology companies and platform providers who need to ensure maximum downtime for their products.

However, in 2021, this technology will grow in adoption with a compound annual growth rate (CAGR) of 32.7%Opens a new window globally. Importantly, deployments will extend outside the technology industry, with sectors like healthcare, government agencies, and MSPs gaining from it.

### 8. Companies will struggle to keep cloud budgets in check

This is a vital trend, one that has been persistent for the last five years, according to a recent survey by Flexera. On average, organizations waste around 30% of their total cloud spends, and optimizing cloud costs is a top priority for 61% of companies.

A different survey by Pepperdata found that one in three businesses faced up to 40% cloud budget overruns in 2020. Therefore, we can expect this to be a challenge this year as well due to growing cloud adoption, making dedicated cloud cost optimization technologies essential.

### 9. Cloud will power widespread AI adoption

Artificial intelligence(AI) is increasingly in demand across all business horizontals and verticals. Cloud computing and the availability of cloud-hosted AI libraries, modeling engines, and algorithms will be crucial to its adoption.

According to Deloitte’s State of AI in the Enterprise survey, 93% of all AI deployments use cloud-based capabilities. The two technologies will continue to grow in tandem across 2021.

### 10. Azure will gradually catch up to AWS, avoiding a market monopoly

Amazon Web Services (AWS), Microsoft Azure, and Google Cloud are recognized as the Big Three in the public cloud segment. AWS has been rapidly gaining market share for some time, and experts have predicted the possibility of a market monopoly.

However, in the last few quarters, Microsoft has grown at an accelerated pace, and the gap between the two is shrinking. In 2021. We could see AWS and Azure going head-to-head for some of the industry’s largest contracts, such as the recent JEDI deal with the U.S. Pentagon.

### Closing thoughts

Cloud computing brought about a 360-degree shift for IT. Thefuture of cloud will bring better ways to build products and services, serve customers, and make discoveries. Business leaders who embrace the potential of cloud computing are sure to gain a competitive edge in this changing landscape – in the tools and software they choose, the cultures they create, or the business strategies they execute.

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Chiradeep BasuMallick

Technical Writer

Chiradeep is a content marketing professional, a startup incubator, and a tech journalism specialist. He has over 11 years of experience in mainline advertising, marketing communications, corporate communications, and content marketing. He has worked with a number of global majors and Indian MNCs, and currently manages his content marketing startup based out of Kolkata, India. He writes extensively on areas such as IT, BFSI, healthcare, manufacturing, hospitality, and financial analysis & stock markets. He studied literature, has a degree in public relations and is an independent contributor for several leading publications.

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