Cloud Computing (part 1)

What is cloud computing, in simple terms

Cloud computing is the delivery of computing services—including servers, storage, databases, networking, software, analytics, and intelligence—over the Internet ("the cloud") to offer faster innovation, flexible resources, and economies of scale.

How does cloud computing work

Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider. One benefit of using cloud-computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use when they use it. In turn, providers of cloud-computing services can benefit from significant economies of scale by delivering the same services to a wide range of customers.

Cloud-computing services cover a vast range of options now, from the basics of storage, networking, and processing power, to natural language processing and artificial intelligence as well as standard office applications. Pretty much any service that doesn't require you to be physically close to the computer hardware that you are using can now be delivered via the cloud – even quantum computing.

What are examples of cloud computing

Cloud computing underpins a vast number of services. That includes consumer services like Gmail or the cloud backup of the photos on your smartphone, though to the services that allow large enterprises to host all their data and run all of their applications in the cloud. For example, Netflix relies on cloud-computing services to run its video-streaming service and its other business systems, too.

Cloud computing is becoming the default option for many apps: software vendors are increasingly offering their applications as services over the internet rather than standalone products as they try to switch to a subscription model. However, there are potential downsides to cloud computing, in that it can also introduce new costs and new risks for companies using it.

Why is it called cloud computing

A fundamental concept behind cloud computing is that the location of the service, and many of the details such as the hardware or operating system on which it is running, are largely irrelevant to the user. It's with this in mind that the metaphor of the cloud was borrowed from old telecoms network schematics, in which the public telephone network (and later the internet) was often represented as a cloud to denote that the location didn't matter – it was just a cloud of stuff. This is an over-simplification of course; for many customers, the location of their services and data remains a key issue.

What is the history of cloud computing

Cloud computing as a term has been around since the early 2000s, but the concept of computing as a service has been around for much, much longer – as far back as the 1960s, when computer bureaus would allow companies to rent time on a mainframe, rather than have to buy one themselves.

These 'time-sharing' services were largely overtaken by the rise of the PC, which made owning a computer much more affordable, and then in turn by the rise of corporate data centers where companies would store vast amounts of data.

But the concept of renting access to computing power has resurfaced again and again – in the application service providers, utility computing, and grid computing of the late 1990s and early 2000s. This was followed by cloud computing, which really took hold with the emergence of software as a service and hyper-scale cloud-computing providers such as Amazon Web Services.

How important is the cloud

Building the infrastructure to support cloud computing now accounts for a significant chunk of all IT spending, while spending on traditional, in-house IT slides as computing workloads continue to move to the cloud, whether that is public cloud services offered by vendors or private clouds built by enterprises themselves.

Tech analyst Gartner predicts that as much as half of spending across application software, infrastructure software, business process services, and system infrastructure markets will have shifted to the cloud by 2025, up from 41% in 2022. It estimates that almost two-thirds of spending on application software will be via cloud computing, up from 57.7% in 2022.

That's a shift that only gained momentum in 2020 and 2021 as businesses accelerated their digital transformation plans during the pandemic. The lockdowns throughout the pandemic showed companies how important it was to be able to access their computing infrastructure, applications, and data from wherever their staff was working – and not just from an office.

Gartner said that demand for integration capabilities, agile work processes, and composable architecture will drive the continued shift to the cloud.

The scale of cloud spending continues to rise. For the full year 2021, tech analyst IDC expects cloud infrastructure spending to have grown 8.3% compared to 2020 to $71.8 billion, while non-cloud infrastructure is expected to grow just 1.9% to $58.4 billion. Long term, the analyst expects spending on compute and storage cloud infrastructure to see a compound annual growth rate of 12.4% over the 2020-2025 period, reaching $118.8 billion in 2025, and it will account for 67.0% of total compute and storage infrastructure spend. Spending on non-cloud infrastructure will be relatively flat in comparison and reach $58.6 billion in 2025.

All predictions around cloud-computing spending are pointing in the same direction, even if the details are slightly different. The momentum they are describing is the same: tech analyst Canalys reports that worldwide cloud infrastructure services expenditure topped $50 billion in a quarter for the first time in Q4 2021. For the full year, it has cloud infrastructure services spending growing 35% to $191.7 billion

Canalys argues that there is already a new growth opportunity for the cloud on the horizon, in the form of augmented and virtual reality and the metaverse. "This will be a significant driver for both cloud services spend and infrastructure deployment over the next decade

What are the core elements of cloud computing

Cloud computing can be broken down into a number of different constituent elements, focusing on different parts of the technology stack and different use cases. Let's take a look at some of the best known in a bit more detail.

What is Infrastructure as a Service

Platform as a Service (PaaS) is the next layer up – as well as the underlying storage, networking, and virtual servers, this layer also includes the tools and software that developers need to build applications on top, which could include middleware, database management, operating systems, and development tools

What is Software as a Service

Software as a Service (SaaS) is the delivery of applications as a service, probably the version of cloud computing that most people are used to on a day-to-day basis. The underlying hardware and operating system is irrelevant to the end-user, who will access the service via a web browser or app; it is often bought on a per-seat or per-user basis.

SaaS is the largest chunk of cloud spending simply because the variety of applications delivered via SaaS is huge, from CRM such as Salesforce to Microsoft's Office 365. And while the whole market is growing at a furious rate, it's the IaaS and PaaS segments that have consistently grown at much faster rates, according to analyst IDC: "This highlights the increasing reliance of enterprises on a cloud foundation built on cloud infrastructure, software-defined data, compute and governance solutions as a Service, and cloud-native platforms for application deployment for enterprise IT internal applications." IDC predicts that IaaS and PaaS will continue growing at a higher rate than the overall cloud market "as resilience, flexibility, and agility guide IT platform decisions".

to be continued........