What is Cloud Computing? A short, simple explanation

The term “Could Computing” is heard and read everywhere these days, and many companies are constantly wondering what exactly it is, and whether they should apply for it or not.

While cloud computing can be discussed from many aspects (for example your Google search can also technically be called cloud computing), I’ll try in this article to give a very simple and short explanation of what this is all about as far as companies are concerned.

Very simply put, cloud computing means storing and accessing applications and data over the internet instead of the hard disks of local servers or computers.

The whole idea behind cloud computing is that instead of businesses needing to handle their own servers and data storage devices locally (which would mean purchase of hardware and software, upgrading and maintaining them and handling their security), they rent the needed services from companies like Amazon or Apple who provide these resources as a service over the internet on a pay-as-you-go basis.

How does Cloud Computing work?

Companies that provide cloud computing services actually host data centers with multiple servers interconnected to each other, and utilize special virtualization software to create a large computing and storage resource that can be divided into virtual resources which are rented to users and clients as a service.

What are benefits of Cloud Computing?

The main users of cloud computing services are SMBs (Small-medium businesses) as it enables them to quickly setup the computing resources they need and pay for only what they use.

The main benefits of cloud computing can be summarized as below:

  • Quick and easy setup: instead of needing experts to configure your local servers and installing the needed applications, you can simply set up the cloud services and resources by going through a few web pages that guide you step by step on how to setup your needed computing resources.
  • Elasticity: You won’t need to worry about upgrading your hardware when your business grows – this can be simply done at any stage you see a need for it.
  • Pay for your use: Instead of investing on hardware and software, their upgrade, and maintaining all that, you simply pay for the services as much as you need and use them.
  • High Accessibility: Most cloud computing services allow you to access your data and applications from anywhere on the internet and by using any connected device such as your tablets or smartphones.

What Services are provided by Cloud Computing?

Services that are provided by cloud computing are divided into 3 sectors:

  • Infrastructure as a Service (IaaS): This means buying access to raw computing hardware such as servers or storage over the internet. You pay for these resources per amount of usage instead of purchasing the hardware.
  • Software as a Service (SaaS): This means using applications that are hosted on the internet. You pay for the software per usage instead of purchasing the software and host it yourself.
  • Platform as a Service (PaaS): This means you develop applications using Web-based tools so they run on systems software and hardware provided by others.


Cloud computing would come with many benefits for SMB companies. However, it also has its drawbacks which I’ve listed below:

  • It fully depends on highly reliable internet: Although this is not an issue these days for most locations, it can be a challenge when you are working in remote/undeveloped locations where you simply don’t have reliable, high-speed internet access.
  • Higher Operation Costs: Cloud services are charged either per user/time or per amount of resource used. While this is a benefit for many SMBs, it can make a cloud solution a costly solution for larger companies, when compared to setting up your own servers and services.
  • Greater Dependency on Service Providers: In cloud computing you are to a big extent dependent on the services provided by the hosting company. If they decide to drop a service, it can cause a big issue for your business.


Cloud computing is rapidly growing and will continue to grow. The issue is not whether you will use cloud computing or not – you are already using cloud computing in many ways if you are using the internet.

But as far as using cloud computing vs setting up your own servers are concerned, it would highly depend on the size of your business: if you are an SMB and your business is not “IT”, then a cloud solution would be most probably the correct choice. For large businesses, you might want to have a second calculation of overall costs before you decide.