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Cloud Computing Explained

Vangie Beal
Last Updated May 24, 2021 8:00 am

An in-depth look at cloud computing for small business, cloud terminology, cloud technologies, private versus public clouds and cloud computing vendors.

Cloud Computing Explained

Cloud Computing Users

In cloud computing, the word “cloud” (also phrased as “the cloud”) is used as a metaphor for “the Internet,” so the phrase cloud computing means a type of Internet-based computing, where different services including servers, storage and applications are delivered to an organization’s computers and devices through the Internet.

Cloud computing is an on-demand service that has obtained mass appeal in corporate data centers. The cloud enables the data center to operate like the Internet and computing resources to be accessed and shared as virtual resources in a secure and scalable manner. Like most technologies, trends start in the enterprise and shift to adoption by small business owners.

Cloud Computing: A Simple Description

In its most simple description, cloud computing is taking services (“cloud services“) and moving them outside an organizations firewall on shared systems. Applications and services are accessed via the Web, instead of your hard drive. In cloud computing, the services are delivered and used over the Internet and are paid for by cloud customer (your business) — typically on an “as-needed, pay-per-use” business model. The cloud infrastructure is maintained by the cloud provider, not the individual cloud customer.

Cloud computing networks are large groups of servers and cloud service providers that usually take advantage of low-cost computing technology, with specialized connections to spread data-processing chores across them. This shared IT infrastructure contains large pools of systems that are linked together. Virtualization techniques are often used to maximize the power of cloud computing.

Currently, the standards for connecting the computer systems and the software needed to make cloud computing work are not fully defined at present time, leaving many companies to define their own cloud computing technologies.

Small Business Cloud Computing

For a small and medium size business (SMB), the benefits of cloud computing is currently driving adoption. In the SMB sector there is often a lack of time and financial resources to purchase, deploy and maintain an infrastructure (e.g. the software, server and storage). In cloud computing, small businesses can access these resources using an Internet connection and Web browser. You can expand (or shrink) services as your business needs change. The common pay-as-you-go subscription model is designed to let SMBs easily add or remove services and you typically will only pay for what you do use.

Public Cloud Versus Private Cloud Explained

Cloud computing denotes a cloud computing platform that is outside of an organizations’ firewall on shared systems. In this scenario, your cloud service provider is in control of the infrastructure. In contrast, a private cloud is the same platform; however it is implemented within the corporate firewall, under the control of the organization’s IT department.

A private cloud is designed to offer the same features and benefits of public cloud systems, but removes a number of objections to the cloud computing model including control over corporate and customer data, worries about security and issues connected to regulatory compliance.

Other Meanings of the Phrase

There are many people out there who believe the term cloud computing is just another buzzword that is used to describe too many technologies, making it confusing to understand — and Webopedia agrees! The term cloud computing has been used over the years to mean a number of technologies including: grid computing, utility computing, software-as-a service (SaaS), Internet-based applications, autonomic computing, peer-to-peer computing and remote processing. When most people use the term, they may have one of these ideas in mind, but the listener might be thinking about something else.

Cloud Computing Terms Defined

The following Webopedia Cloud Computing Glossary of terms will help you to better understand the new language that has surfaced around the topic of cloud computing. Click here to read the Cloud Computing Glossary of terms.


Based in Nova Scotia, Vangie Beal is has been writing about technology for more than a decade. She is a frequent contributor to EcommerceGuide and managing editor at Webopedia. You can tweet her online @AuroraGG.

This article was last updated on June 01, 2014