Cloud computing is the delivery of computing services such as servers, storage, databases, networking and software over the internet. Users access these resources on demand and typically pay only for what they use.
Technological innovations have changed business life, and cloud computing is one of the biggest. It grows more popular every day, yet many people still ask what it is. This guide explains what cloud computing is, its five key features, its service models, its deployment types and its advantages. The US National Institute of Standards and Technology (NIST) describes the cloud model with five essential characteristics, three service models and four deployment models. We follow this structure below.
Cloud computing delivers applications, software, storage and other resources over the internet from a network of remote servers. Users reach applications and data from anywhere at any time. It became widespread as an alternative to IT infrastructure that creates high costs.
The word cloud is a metaphor for the internet. It shows that organizations can operate in a scalable, cost-effective and reliable way.
NIST defines cloud computing as a model that gives convenient, on-demand network access to a shared pool of configurable computing resources. Providers release these resources quickly with minimal management effort.
The idea is not new. According to an academic overview, a Compaq internal document mentioned it in 1996. Amazon commercialized it in 2006 with Elastic Compute Cloud (EC2). Google App Engine followed in 2008, and Microsoft Azure launched in October 2008.
Cloud computing is service-oriented and virtualizes hardware and software. It gives users access to shared pools of computing resources with minimal management effort. Automation provisions processing power, storage capacity and network bandwidth rapidly. Cloud computing rests on five key features.
On-demand self-service: Users provision computing capabilities, such as server time and network storage, whenever they need them. They do not need human interaction with the provider.
Broad network access: Users reach cloud resources from different places at the same time. Tablets, computers and smartphones connect to the cloud through the internet.
Multitenancy and resource pooling: A provider shares resources among multiple customers. Users share the same applications or the same physical infrastructure while their information stays private and secure.
Rapid elasticity and scalability: The provider matches allocated resources to the actual need within a short time. IT resources grow or shrink as customer demand changes.
Measured service: Users monitor which services they use and for what purpose. The provider uses resources optimally and tracks billing.
Cloud computing has a wide range of uses. Organizations use it for:
The cloud computing stack maps the different layers of a cloud deployment model. It is an abstract model, and not every provider uses it in the same way. Three main service models represent different parts of the stack.
Service model | What the provider delivers | Example |
IaaS (Infrastructure as a Service) | Virtualized computing, storage and networking on demand | Amazon EC2, Google Compute Engine |
PaaS (Platform as a Service) | Preconfigured environment to develop and deploy applications | Google App Engine, SAP BTP |
SaaS (Software as a Service) | Complete software delivered through a browser | Gmail, Dropbox, HubSpot |
IaaS gives you virtualized resources that you provision on demand. These resources include computing, storage and networking. The provider manages them, so you can set them up and use them right away.
PaaS provides preconfigured environments to develop and deploy applications in the cloud. Everything needed for development is already in the package. Developers do not install anything themselves and do not spend time configuring their environment first. SAP Business Technology Platform (SAP BTP) is an example of a PaaS offering.
SaaS reaches users through the internet, usually in a browser. A vendor or a third-party provider hosts the application on its own servers. The software does not sit on the customer's computer. It runs on the vendor's server.
Not all clouds are the same. Organizations choose a deployment model that fits their needs. First, decide which cloud deployment type your cloud services will use.
A third-party provider owns and operates a public cloud. Anyone can use its resources over the internet. Amazon Web Services, Microsoft Azure and Google Cloud are public cloud providers. Companies that use them do not need to maintain their own IT environment for these resources.
A single organization uses a private cloud. It suits companies that prioritize privacy and control, such as a large bank that keeps its data in one cloud structure and serves all its branches from it. The cloud can sit in the company's own data center or with a third-party provider.
A community cloud serves a specific group of organizations with similar requirements. These organizations work on shared goals, projects or research. One or more of them, or a third party, can manage the cloud.
A hybrid cloud combines two or more cloud structures, such as a private and a public cloud. It lets an organization keep sensitive data on its own systems and use the public cloud for other workloads. This gives more flexibility in how the organization manages information and software.
Cloud computing exists in almost every part of our lives, even if we do not notice it. Here are examples by service model:
Cloud computing also connects business applications. Read how companies link cloud solutions in our article on the integration of SAP Cloud for Customer with SAP S/4HANA Cloud. To connect cloud and on-premises applications in one flow, learn what iPaaS is.
Many businesses now move to cloud infrastructure. It offers many advantages and opens new opportunities. The main benefits are:
Read more about the business value of the cloud in our article on the benefits of SAP BTP for business.
Cloud computing does not remove every risk. Users need an internet connection to reach cloud resources. Security works on a shared responsibility model: the provider secures the platform, and you secure your own data, access and configuration. Pricing models differ between providers, so compare long-term costs before you choose.
At MDP Group, we help companies run SAP workloads and integrations on cloud platforms such as SAP BTP. Before a move, we recommend that you list your applications, decide which data can go to a public cloud and choose the deployment type that fits your security and compliance needs.
Cloud computing means using servers, storage, databases and software over the internet instead of owning them. You access the resources on demand and usually pay only for the capacity you use.
The three service models are Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). IaaS gives infrastructure, PaaS gives a development platform and SaaS gives ready-to-use software.
The four deployment models are public, private, community and hybrid cloud. They differ in who owns the cloud, who uses it and how much control the organization has over its resources.
Cloud providers use technologies that protect data, applications and infrastructure. Security still depends on shared responsibility. You must protect your own data, user access and configuration, and choose a provider that meets your compliance needs.
Cloud computing delivers computing services over the internet on demand. Five key features, three service models and four deployment models describe how it works. Choose the model that fits your security, cost and scalability needs. For SAP cloud and integration projects, explore our SAP consultancy services.
SAP PI/PO Consultant
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