What is Cloud Computing? Definition, Types & Examples

Updated Feb 14, 2023.

Cloud computing is one of the fastest-growing technological trends in today’s world. An ever-increasing number of businesses are turning to cloud platforms to help resolve their greatest technical challenges, some of which include remote work and cyberthreats.

One of the biggest attractions of cloud computing is how it transforms IT infrastructure into a utility easily accessible over the internet. Thanks to cloud computing, businesses with financial constraints are saved valuable resources they would have expended on installing and running on-premise devices.

In this article, you will learn everything you need to know about cloud computing, including the leading cloud computing providers and emerging cloud technologies.

Let’s get started.

What is Cloud Computing?

Cloud computing is the assessing and storing of data through the internet. This is the delivery of hosted services like data storage, database, application, server, and networking at a remote center operated by cloud service providers.

Another definition of cloud computing is that it is the use of off-site systems to store, process, and manage information that can be accessed over the internet.

Data stored on the cloud can be accessed through a secure network connection. Cloud computing makes use of multiple cloud servers to operate thereby delivering fast and reliable services to many people.

The use of the cloud has increased over the years because of guaranteed security, affordability, improved speed, round-the-clock availability, and scalable services.

Cloud computing services are useful to virtually everyone including the banking sector, educational sector, healthcare, government, businesses, communication, and personal use.

How Does Cloud Computing Work

Three important components make cloud computing function.

1. Front-end

The front-end is the visible part of the computer. It is an important part that interacts with the end-user and it shows a connection to the cloud computing infrastructure. This part comprises the software application, the user interface, and the user's hardware.

2. Back-end

The back-end is located on a remote server and consists of hardware and storage. This contains the whole cloud infrastructure holding the following;

  • Application, that is, the user interface.
  • Storage formed by the server's hard drive.
  • Virtualization used in creating cloud runtime.
  • Service that executes every task on the cloud system.

3. Cloud-based Delivery

These refer to the models through which cloud computing services are offered. This can be in the form of Software as a Service (SaaS), Infrastructure as a Service (IaaS), or Platform as a service (PaaS).

Cloud computing services
Source: Jakegroup

All three parts of cloud computing (front end, back end, and cloud-based delivery) are connected through an internet connection. The front end represents the user's device while the back end comprises many servers and storage systems that make up the cloud.

The cloud is managed by a central server that attends to the requirements of consumers through the middleware. This middleware is software that allows communication between connected computers.

Types of Cloud Computing Services

1. Infrastructure as a Service (IaaS)

Infrastructure as a Service (IaaS) is a type of cloud computing service that allows a vendor to provide access to computing resources to many users. Important storage and network resources are made available based on demands.

There is no extra cost for using this type of cloud computing service because it allows the freedom of selecting the resource of your choice. Making use of IaaS leads to the reduction of cost expenditure, improved business, and increased reliability.

Examples of Infrastructure as a Service (IaaS) include:

  • Amazon Web Services (AWS)
  • Microsoft Azure
  • Linode
  • Google Compute Engine (GCE)

2. Platform as a Service (PaaS)

Platform as a Service (PaaS) is a computing service that provides an environment meant for the testing, managing, and developing of software applications. The third-party provides the software and hardware tools to other users through the internet.

Developers use PaaS to create applications and webs easily. Other services that PaaS provides include application testing and design, database integration, web service integration, and more. These services are all available on the infrastructure of the third party and accessible mostly through the web.

Examples of Platform as a Service (PaaS) providers include:

  • Google App Engine
  • AWS Elastic Beanstalk.

3. Software as a Service (SaaS)

Software as a Service (SaaS) is a software licensing model that allows cloud providers to host applications, making them available to users on the internet. There is no need to install such software, it is readily available online.

This computing service gives access to data from any device with internet connection. Implementing Software as a Serive (Saas) allows you to easily modify software to suit your preferences due to its flexibility.

SaaS providers use a highly secure public cloud to safekeeping their customers' data. Examples of Software as a Service (SaaS) providers include:

  • Salesforce
  • Dropbox
  • Google Workspace
  • Microsoft Office 365
Differences Between IaaS, PaaS and SaaS
Source: INAP

4. Function as a Service (FaaS)

Function as a Service (FaaS) is used for the deployment of applications on the cloud. FaaS is also referred to as serverless computing. Application packages are built, managed, and run without developers making use of their personal infrastructure.

Some examples of FaaS providers include

  • Google Cloud functions
  • IBM cloud functions
  • OpenFaaS
Function as a Service FaaS infographic
Source: Researchgate

Types of Cloud Computing Use Cases (with Examples)

1. Data Analytics

The collection of large amounts of data requires a lot of resources which can be very expensive. With cloud computing, you only pay for the resources you need. This is cheaper, saves cost, and is easy to use.

Software as a Service model is used by cloud service providers for easy processing of data. Examples of SaaS providers include Microsoft Azure and Amazon AWS.

2. Desktop as a Service (DaaS) or Virtual Desktops Infrastructure (VDI)

Virtual Desktop Infrastructure (VDI) allows the use of virtual machines as cloud resources. They are hosted on the cloud and work to control, access, secure data, and information uploaded in the cloud.

Desktops are logged remotely and workers have access to files from their personal devices, any time and from anywhere. Examples of Virtual Desktop Infrastructure (VDI) include Microsoft, VMware, and Parallels.

DaaS is similar to VDI but it is managed by the service providers. They improve security and are cost-effective. Examples of desktop-as-a-service providers include Citrix, Desktone (a VMware company), and Amazon.

Difference between VDI vs. DaaS
Source: Office1

3. Email

Cloud-based emails are operated by third-party providers. They are usually separated from personal emails because they carry information about an organization or business. Cloud-based emails allow you to adjust your needs like storage capacity whenever you want and utmost security is guaranteed.

Examples of cloud-based email service providers are Outlook, Gmail, Protonmail, Yahoo mail, and more.

The Widespread Usage of Email
Source: Oberlo

4. Data Backup

Data is backed up in the cloud by copying and storing files and applications on a particular server to a remote server. It can get lost through hacking, viruses, or accidentally.

To avoid setbacks or total loss, it is advisable to back important files up to cloud storage. This helps to retrieve and keep your data intact. Some of the best data backup software include IDrive, Backblaze, and Acronis True Image.

5. Communication and Online Networking

Social media is used for calling, texting, and sharing information. Communication tools such as applications like Facebook, Instagram, WhatsApp, emails are developed on the cloud. This is where posts, messages, or media sent and received are stored.

Through the internet, all these files are accessible. These applications are all hosted through the cloud.

6. Data Storage and Recovery

A very important use of the cloud is for storing files. The cloud provides access to files uploaded, allows editing and securing of data. You get to purchase as much storage space as you need at affordable prices.

Also, if any data gets lost, as long as they have been uploaded on the cloud, such files can be easily recovered. It is cheaper and time-saving than using data recovery software. Examples of these cloud storage services include OneDrive, Dropbox, Google Drive.

Cloud Computing Characteristics

There are several distinctive characteristics of cloud computing you should take note of.

1. On-demand Self-service

Cloud computing gives the consumer a say in deciding the purchase of resources needed. Service consumers are allowed access to services without asking for permission or having to go through manual processes. These service consumers can monitor the server, storage, and computing capabilities.

2. Security

To prevent and guide against any form of data loss, there is a stored duplicate that can be restored in such cases. Data is kept safe in case of file corruption or deletion or cyber-attacks. Examples of data security on the cloud are firewalls, data encryption, and more.

3. Broad Network Access

Cloud computing has large network access. Data can be accessed and uploaded on the cloud by users from any location in the world through the use of internet-connected devices like desktops, laptops, mobile phones, tablets, and more.

4. Resource Pooling

Service providers pool computing resources like bandwidth, storage, processing to satisfy a lot of consumers through the use of multi-tenant models. Several users share these resources depending on their requirements.

5. Measured Services

Cloud computing systems help to control the use of resources like network bandwidth, storage space to make sure there is a constant supply. This is to meet the demands of consumers.

6. Automation

Automation is the ability to handle automatic maintenance, installation, and configuration. This is beneficial in cloud computing because it helps to keep track and monitor activities without wasting time. Automation helps reduce the use of manual labor.

Examples of automation tools include Microsoft Azure Automation, CloudFormation, and more.

7. Maintenance

Cloud computing is very easy to maintain. Resources undergo updates from time to time. This helps to optimize their capabilities and improve their functioning by making them faster than the old versions.

Advantages of Cloud Computing

Cloud computing has a lot of advantages for business and personal use. The advantages of cloud computing are becoming very attractive for businesses as more and more businesses devote more resources to cloud computing models.

1. Efficient Collaboration

Progressive teamwork is achieved through collaboration. Workers get to achieve goals and operate at the same time. Using the cloud helps for easy monitoring to avoid mistakes. This also encourages transparency.

2. Automated Updates

Another benefit of using the cloud is the access to automatic updates. Your system, servers, software, and processing power will be upgraded to newer and better versions automatically.

3. Flexibility and Scalability

Users of cloud computing can access their data from any location. They can also make quick changes in their demand for resources without adding extra costs or wasting time.

4. Affordable Costs

Cloud computing is considered cost-efficient because all software and hardware needed are provided. Also, it is cheap to maintain because maintenance is covered by the service providers. There will be no delays, no need to pay for experts, and energy costs are reduced.

5. Mobility

Files stored on the cloud can be accessed anytime and anywhere as long as there is an internet connection. In cases where workers are not available at the company, they can be kept up-to-date with the happenings and developments in the company.

6. Security

Mostly, people use cloud computing because of security. Storing data on the cloud helps to keep your files safe from cyber attacks, virus attacks, and data loss.

The use of data encryption and security measures such as two-factor authentication is implemented by cloud service providers to protect cloud data and information.

Cloud Computing Challenges

Despite the numerous advantages of cloud computing, it is not without its flaws. Although cloud computing service providers are improving their cloud services, there are still some challenges confronting cloud computing.

1. Privacy and Security

Although the use of encryption has been introduced to keep files on the cloud safe, there is no guarantee of complete privacy or security against hackers and other cyber attacks.

Other ways to reduce breaches of privacy are data recovery software, the use of security applications, security hardware, and more.

2. Little or No Resource

Lack of facilities or well-skilled workers can serve as a hindrance to the smooth running of the cloud. Organizations need to hire more experts in the field. Improved tools are to be made available alongside experts to operate them.

3. Reliability of Cloud Computing Service Providers

Cloud service providers must offer great services to their consumers. It is up to the service providers to render reliable services and access to computing resources. However, not all cloud computing service providers offer quality services.

4. Cost

The price of setting up and maintaining the cloud is on the high side. Most times, organizations spend too much on investing in the cloud.

Bandwidth cost is expensive especially for organizations with data-intensive applications. Enough bandwidth is required to deliver complex data on the cloud hence, leading to high expenses.

5. Data Migration Problems

If there is a need for any consumer to migrate to other service providers, users may encounter difficulties due to restrictions placed by some cloud service providers. Not all cloud service providers make it easy for users to migrate from their platform to another.

6. Management of Multi-Cloud

The use of multi-cloud infrastructure has increased over the years in many companies, this is due to cost management and efficient output. Managing multi-cloud infrastructure is more challenging than operating a single cloud.

Cloud Computing Deployment Models

Cloud computing deployment models describe the environments meant for the installation of cloud services or applications for the use of consumers. There are four types of deployment models.

1. Private Cloud

A private cloud is a type of cloud computing deployment model that provides an environment for just one business or organization, on a private network. This offers an improved degree of control to the organization.

The purpose of the private cloud is an easy response to requests for digital transformation made by end-users. There is security and limitation of access to certain data.

Private cloud provides privacy, flexibility, and implementation of privacy policies. The cost of setting up a private cloud is expensive but saves resources. This is a type of investment because it allows savings due to the reduction of the cost of getting new hardware.

Another benefit is time-saving, allowing strategic technology decisions to be made. This also fastens the traditional ticketing process by a lot of IT organizations.

Private Cloud Infographic
Source: Toolbox

2. Public Cloud

A public cloud is a type of model that allows accessibility to a wide range of users. This is available over the internet and is provided by third-party service providers. Unlike the private cloud, it is cheaper to set up, manage and make use of.

In a company where the public cloud is used, various workers are allowed to make use of the application from any location and on any device.

Additional security measures like intrusion detection and prevention systems (IDPS) can be used alongside to make the cloud as secure as private ones. One of the differences between private cloud and public cloud is that the former gives you more security.

Public Cloud Infographic
Source: PhoenixNAP

3. Hybrid Cloud

The definition of hybrid cloud: It is the mix of private cloud and public cloud.. A hybrid cloud is a computation model that has an environment in which on-premises private clouds and third-party public clouds are operated.

These clouds are bound together by proprietary technology that allows portable data and applications. Some of the best hybrid cloud computing solutions include Microsoft Azure, Alibaba Cloud, Amazon Web Services, Google Cloud Platform, and IBM Cloud Solutions.

Hybrid Cloud by the Numbers
Source: IBM

4. Community Cloud

The community cloud is a cloud computing model that is shared by several organizations with the same goals (or belonging to the same community). Its cloud data center is built to be shared by members of that community.

Community cloud is considered more affordable than the private cloud and a bit more secure than the public cloud.

Community Cloud Comparison
Source: Researchgate

Leading Cloud Computing Service Providers

Best Cloud Computing Service Provider with Free Features and Cheap Plans

Google Cloud is the Best Cloud Computing Service Provider with Free Features and Cheap Plans

Google Cloud is one of the best cloud computing service providers trusted by top companies such as Unilever, Twitter, Nintendo, PayPal, Shopify, Spotify, Toyota, and other users across 200+ countries.

Main Features

  • Databases: Manage your data services securely and efficiently on the Google Cloud Platform. You can easily migrate enterprise data securely and reliably on the platform and run critical workflows like Oracle, VMware, Windows, and SAP natively.
  • Smart Analytics: Google Cloud helps organizations build their data cloud and turn complex analytics into actionable insights. This cloud computing service provider provides real-time business insights for faster and more accurate decision-making and eliminates constraints of cost, scale, and performance.
  • Security: Protect your files in the cloud with Google’s advanced security solutions. Google Cloud helps you to detect and tackle cyber security threats, protecting your information from damage, loss, or theft.
  • Business Application Platform: Google Cloud manages most of your cloud services, making it easy for users to concentrate on other priority tasks. You can create applications easily and automate processes securely with no knowledge of coding thanks to its easy-to-use API functions. The API detects speech and translates languages easily.
  • Productivity and Collaboration: Connect with Google Workspace which gives you access to popular cloud-based Google apps such as Drive, Gmail, Calendar, Docs, and Google Meet from any device.


  • 20+ free products such as free cost management tools and AI-powered recommendations
  • Free trial
  • Excellent user interface
  • An extensive set of APIs and developer tools
  • High security

Leading Cloud Computing Service Provider that Offers Enterprise-Grade Cloud Computing Solutions

AWS is the Leading Cloud Computing Service Provider that Offers Enterprise Grade Cloud Computing Solutions

Launched in 2006 by Amazon, Amazon Web Services (AWS) has come to be one of the largest cloud service providers on the internet today. It is trusted by over 1 million users including top companies like Netflix and Airbnb.

Main Features

  • Cloud Computing: This cloud service provider gives you solutions to inadequate computing resource problems, offering you virtualized computers and servers as well as a comprehensive management portal to track and control them.
  • Front-End Web and Mobile Development: You have features dedicated to your software development needs, specifically covering web and mobile applications.
  • Storage: With AWS, you have a platform to store your enterprise-wide data and information. Storage goes as large as petabytes in size.
  • Migration and Transfer: Your migration to and from other cloud service providers is made seamless through integrations and user-friendly policies.


  • Scalable and flexible
  • Improved productivity
  • Unlimited server capacity
  • High security
  • Ease of use
  • Reliable encryption and security

Top Cloud Service Provider with Extended Machine Learning Solutions

Microsoft Azure is the Top Cloud Service Provider with Extended Machine Learning Solutions

Microsoft Azure is a cloud service provider that offers on-premises, cloud, multi-cloud, and hybrid virtual solutions to all scales of businesses.

Main Features

  • Cloud Computing: With Microsoft Azure, your dedicated cloud computing solutions include creating and deploying VMs within minutes, having access to open-source applications, a high-security architecture, and trigger apps with serverless computing.
  • App Development: Microsoft Azure serves as a competent cloud service provider to run your app development workflows on. Through the Azure Cosmos DB, you have access to an open API to develop NoSQL apps at small, medium, and large scales. You also have access to serverless containers for your app development.
  • Machine Learning: This cloud service provider lets you build, train, and deploy AI into your developed apps. You do this through APIs, with additional capabilities to add AI content search to apps, create cross-channel bots, and apply advanced-level languages for different use cases.


  • On-demand scalability
  • Speed of service
  • High security
  • Enhanced flexibility
  • Disaster recovery
  • User-friendly interface

Reliable Cloud Service Provider for Large Businesses that Offers Dedicated SAP solutions

IBM Cloud is a Reliable Cloud Service Provider for Large Businesses that Offers Dedicated SAP solutions

IBM Cloud is an enterprise-grade cloud service provider that places a focus on security, hybrid cloud technology, and AI-powered solutions for your business.

Main Features

  • VMWare: IBM Cloud equips you with virtual machine software over the cloud, meaning you get rid of your on-premises infrastructure and the additional issues that come with it.
  • SAP: Through integrations with the online platform, the cloud service provider offers you a dedicated solution for your SAP workloads. You have access to integrated and highly secured options that help you manage your business and customer relation operations over the cloud.
  • Backup And Restore: IBM Cloud has your critical IT systems covered, assuring you of quick data restorations and maximum uptime in case of any issues.
  • Hosting: Cloud hosting solutions are available to you. These include the more basic website hosting options to virtual private servers and more performant servers dedicated to game hosting.


  • Automation
  • Flexibility
  • Dedicated financial solutions
  • Built-in AI assistant for customer servicing
  • GPU computing powered by Nvidia
  • Easy cloud migration
  • Edge computing
  • Solutions for application development

Leading Cloud Service Provider for eCommerce Brands with High Uptime and Performance

Alibaba Cloud is the Leading Cloud Service Provider for eCommerce Brands with High Uptime and Performance

Alibaba Cloud is a cloud platform offering low-cost solutions facilitating your website building, corporate enterprise service, enterprise-scale messaging, and business management operations.

Main Features

  • Elastic Computing: With Alibaba Cloud, your cloud computing resources remain as flexible as ever. You easily scale server resources up or down depending on your exact resource needs and usage.
  • Centralized Computing: This cloud service provider serves as a comprehensively featured, one-stop service for your application deployment and security management, as well as your operation and maintenance monitoring, among others.
  • Load Balancing: Traffic on your servers is automatically redistributed so you maintain maximum performance from them at all times.


  • Relatively low cost
  • Dedicated solutions for different scales of businesses
  • Dedicated FinTech solutions
  • Networking and CDN solutions
  • Over 200 products and services
  • Customer service support

Cloud Security

Cloud security, also a cloud security application (CSA), is the act of protecting cloud-based data and applications from cyber threats and attacks. This refers to the steps taken to keep data and digital assets safe. There is constant monitoring and activation of alerts systems.

Individuals and organizations that save their data to the cloud for safety need cloud security for extra safety from security breaches, data loss, or data storage malfunction. Cloud security can be offered by in-house IT officials.

Nowadays, third-party cloud security providers are mostly in charge of cloud security. While selecting which cloud service provider to use, precautions must be taken to prevent putting your data in the hands of potential hackers no matter who they are.

1. Firewalls

This is a network security system used for inspecting and filtering incoming and outgoing network traffic. This can be in the form of software or firmware. Firewalls are used to detect attacks and eventually defend your network against such attacks.

2. VPNs

Virtual Private Networks (VPNs) allow secure access to a company's data on the cloud by the employees through computer devices or websites. They are used to secure data from being accessed by just any device.

Unlike traditional VPNs, cloud VPNs provide a global secure connection infused with the company's cloud. Some of the best VPN services include ExpressVPN, NordVPN, IPVanish, PureVPN, CyberGhost, Hotspot Shield, and ProtonVPN.

VPN Usges by Region
Source: 99Firms

3. Data Encryption

Encryption of data is a popular method for data security. This is the transformation of data to secret codes before storing it in the cloud. The codes can be decrypted by encryption keys. This is used for the limitation of access to data.

4. Two-factor Authentication

Two-factor authentication is the use of additional security to protect data. It is the use of random codes in addition to usernames and passwords.

Tools used in securing cloud are:

  • Cloud access security brokers
  • Cloud security posture management
  • Cloud workload protection platforms
  • Secure access service edge
  • Zero-trust network access

History of Cloud Computing

There is no certain knowledge of who invented cloud computing. In the early 1960s, J.C.R Licklider, a computer scientist, on one of his many research attempts on other uses of the computer, envisioned the interconnecting and assessing of data from any location in the world. This idea was known as an ‘intergalactic computer network.'

Since then, there has been a series of development and evolution on the idea of cloud computing. However, in 1990, Salesforce pioneered the storage of sales data on Salesforce computers. The model was quickly considered by various application developers.

Around 2002, Amazon came up with Amazon Web Services (AWS). This was able to offer cloud-based services of storage and computation. Amazon Web Services was however restricted to individuals with credit cards.

In 2006, another web service known as Elastic Compute Cloud (EC2) was released by Amazon. This allowed the rent of space on the cloud. Large organizations are not the only ones allowed to rent space on the cloud but also small businesses without the need to own data servers.

With Elastic Compute Cloud (E2C), cloud computing became accessible to everyone and not just large businesses.

Emerging Cloud Technologies

Cloud technologies are improving and developing at a rapid pace.

1. Artificial Intelligence (AI)

Artificial Intelligence is the ability of a computer, machine, or robot to function and perform tasks like humans. This will help to enhance the speed and functioning of cloud computing. Some cloud computing service providers offer AI tools like machine learning.

The Future of Artificial Intelligence
Source: Statista

2. Internet of Things (IoT)

IoT is the connection of various devices to the internet. These IoT devices will contain chips (with sensors and processors) that act on data received from sensors through machine learning.

Home gadgets would be able to function almost individually and pass information while being controlled by you. For example, turning on a lightbulb with a mobile application. IoT is also known as edge computing and its data can be processed through the cloud.

Benefits of IoT to Business
Source: Financesonline

3. Integrated Blockchain Technology

An increasing number of companies understand the diverse benefits of using blockchain. According to blockchain stats, global spending will only increase in the following years, reaching a whopping 19 billion dollars (see the image below).

Blockchain is a decentralized ledger used for keeping records of transactions. The decentralization of information makes it hard to tamper with as information is not stored in a particular location. Blockchain is used to store information and keep various forms of data.

The connection of blockchain technology to the cloud helps to track a product's life cycle. This helps to detect and plan against setbacks.

4. Quantum Computing

Quantum Computing is an aspect of computing that deals with the development of computer technology by using properties of quantum physics to store and compute data. This is a more advanced form that increases the speed of organizing, processing, and storing data.

5. Containers

Containers are a type of software for packaging codes and their entities (libraries and configuration files) to ensure the smooth running of applications. They are used to quickly develop software. Examples of containers are CoreOS Linux, RancherOS, and more.

6. Integrated SaaS

SaaS integration is the connection of SaaS applications to a separate computer system through application programming interfaces (APIs). This allows the secure distribution of applications in an organization without configuration. Also, it allows for working on the cloud without the use of the public domain.

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Martin Luenendonk

Editor at FounderJar

Martin loves entrepreneurship and has helped dozens of entrepreneurs by validating the business idea, finding scalable customer acquisition channels, and building a data-driven organization. During his time working in investment banking, tech startups, and industry-leading companies he gained extensive knowledge in using different software tools to optimize business processes.

This insights and his love for researching SaaS products enables him to provide in-depth, fact-based software reviews to enable software buyers make better decisions.