# Understanding Cloud Computing: Benefits, Services, and Security

![Cloud Computing](https://www.investopedia.com/thmb/MCRjhLeTSVWT-0e9buFaC8pxPYg=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/cloud-computing-4199287-f346729f8f574000a3058b9ad69e9a41.png)

*— Investopedia / Joules Garcia*

## What Is Cloud Computing?

Cloud computing delivers computing services—like servers, storage, databases, networking, software, and analytics—on demand over the internet. Instead of storing files locally on a hard drive, [cloud-based storage](https://www.investopedia.com/terms/c/cloud-storage.asp) allows users to save and access data from remote servers, providing flexibility and accessibility. For both individuals and businesses, cloud computing offers benefits such as cost savings, improved productivity, rapid deployment, enhanced performance, and robust security measures.

### Key Takeaways

*   Cloud computing provides on-demand delivery of services like storage, servers, and software over the internet, allowing for remote data saving and access from any internet-connected device.
*   There are three main types of cloud computing services: Software as a Service (SaaS), Infrastructure as a Service (IaaS), and Platform as a Service (PaaS), each serving different user needs.
*   Cloud solutions can be public, private, or hybrid, offering varying levels of accessibility and control based on user requirements.
*   While cloud computing offers benefits such as cost savings and increased efficiency, it also raises security concerns, requiring robust protection measures like encryption and firewalls.
*   Major service providers like Amazon Web Services and Microsoft Azure facilitate cloud computing, with options ranging from fully public services with flexible pricing to private clouds with in-house data retention.

## How Cloud Computing Manages and Stores Data

Cloud computing means data is stored remotely in the cloud or a virtual space. Companies that provide cloud services enable users to keep files and applications on remote servers and access all data via the Internet. An individual's or company's data, work, and applications are available from any device that connects to the Internet.

Cloud computing can be both public and private. Public cloud services are available to anyone for a fee over the Internet, while private cloud services are limited to specific users. These services are a system of networks that supply hosted services. There is also a hybrid option, which combines public and private services.

## Exploring Different Types of Cloud Services

*   Email
*   Storage, backup, and data retrieval
*   Creating and testing apps
*   Data Analytics
*   Audio and video streaming
*   Delivering software on demand

> **Important**
>
> Amazon Web Services (AWS) uses cloud computing to power real-time fraud detection and prevention of erroneous financial transactions of individuals and businesses.

## Understanding Cloud Computing Platforms: SaaS, IaaS, PaaS

Cloud computing is a system primarily comprised of three services: [software-as-a-service](https://www.investopedia.com/terms/s/software-as-a-service-saas.asp) (SaaS), infrastructure-as-a-service (IaaS), and platform-as-a-service (PaaS).

1.  **Software-as-a-service (SaaS)** involves the licensure of a software application to customers. Licenses are typically provided through a pay-as-you-go model or on-demand. This type of system can be found in Microsoft Office 365.
2.  **Infrastructure-as-a-service (IaaS)** delivers everything from operating systems to servers and storage through IP-based connectivity as part of an on-demand service. Clients do not need to purchase software or servers and instead procure these resources in an [outsourced](https://www.investopedia.com/terms/o/outsourcing.asp), on-demand service. Popular examples of the IaaS system include IBM Cloud and Microsoft Azure.
3.  **Platform-as-a-service (PaaS)** is considered the most complex of the three layers of cloud-based computing. PaaS shares some similarities with SaaS, but instead of delivering software online, it is a platform for creating software delivered via the Internet. This model includes platforms like Salesforce.com and Heroku.

## Weighing the Pros and Cons of Cloud Computing

Thanks to cloud computing, users can check their email on any computer and store files using services such as Dropbox and Google Drive. Cloud computing lets users [back up](https://www.investopedia.com/terms/b/back-up.asp) their music, files, and photos. Companies were once required to purchase, construct, and maintain costly [information management technology](https://www.investopedia.com/terms/i/information-management-technology-imt.asp) and infrastructure. Companies can swap costly server centers and IT departments for fast Internet connections, where employees interact with the cloud online to complete their tasks.

The cloud structure saves storage space on desktops or laptops. It also lets users [upgrade](https://www.investopedia.com/terms/u/upgrade.asp) software via the web rather than through more traditional, tangible methods involving discs or flash drives. However, security is a concern, especially for medical records and financial information.

While regulations force cloud computing services to shore up their security and compliance measures, it remains an ongoing issue. Encryption is commonly used to protect vital information. Cloud servers can be affected by natural disasters, bugs, and power outages. As with any technology, with many individuals accessing and manipulating information through a single portal, mistakes can transfer across an entire system.

## Leading Cloud Service Providers: AWS, Azure, and Alibaba Cloud

*   Google Cloud
*   [Amazon Web Services](https://www.investopedia.com/articles/etfs-mutual-funds/080516/4-etfs-fang-stocks-fdnpnqiqqqskyy.asp) (AWS)
*   Microsoft Azure
*   IBM Cloud
*   Alibaba Cloud
*   Dell Cloud
*   Oracle Cloud

Amazon Web Services is 100% public and includes a pay-as-you-go, outsourced model. Once on the platform users can sign up for apps and additional services. Microsoft Azure allows clients to keep some data at their sites. Meanwhile, Alibaba Cloud is a subsidiary of the Alibaba Group.

## What Is an Example of Cloud Computing?

Businesses and individuals use cloud applications like streaming platforms, where media files are stored remotely, and data storage services like Google Drive, Dropbox, OneDrive, or Box.

## Is Cloud Computing Safe?

[Cloud security](https://www.investopedia.com/terms/c/cloud-security.asp) refers to efforts to protect digital assets and data stored on cloud-based services. Measures to protect this data include two-factor authorization (2FA), the use of VPNs, security tokens, data encryption, and firewall services, among others.

## What Is Cloud Hacking?

Cloud hacking is when a cyber attack targets cloud-based service platforms, such as computing services, storage services, or hosted applications.

## The Bottom Line

People and businesses use cloud-based storage instead of local hard drives. Cloud computing is comprised of three services: (SaaS), (IaaS), and (PaaS). Providers allow users to store email, backups, data, audio, and video.

> **Article Sources**
>
> 1.  Amazon. "[AWS Free Tier](https://aws.amazon.com/free/?trk=fce796e8-4ceb-48e0-9767-89f7873fac3d&sc_channel=ps&sc_campaign=acquisition&sc_medium=ACQ-P|PS-GO|Brand|Desktop|SU|Core-Main|Core|US|EN|Text&s_kwcid=AL!4422!3!423740514695!e!!g!!amazon%20web%20services&ef_id=Cj0KCQjwpcOTBhCZARIsAEAYLuWfkk5M17s5UXO96aJqxqHhywB4cIgyoYiJ3W9u1c_AVvzXjjnr2PUaAh3WEALw_wcB:G:s&s_kwcid=AL!4422!3!423740514695!e!!g!!amazon%20web%20services&all-free-tier.sort-by=item.additionalFields.SortRank&all-free-tier.sort-order=asc&awsf.Free%20Tier%20Types=*all&awsf.Free%20Tier%20Categories=*all)."
>     
> 2.  Microsoft. "[What Is SaaS?](https://azure.microsoft.com/en-us/overview/what-is-saas/)"
>     
> 3.  IBM. "[IBM Cloud Infrastructure as a Service](https://www.ibm.com/cloud/infrastructure)."
>     
> 4.  Heroku. "[The Heroku Platform](https://www.heroku.com/platform)."
>     
> 5.  Salesforce. "[What Is PaaS (Platform as a Service)?](https://www.salesforce.com/paas/overview/)"
>     
> 6.  Google. "[Google Drive, Easy and Secure Access to Your Content](https://www.google.com/drive/)."
>     
> 7.  Dropbox. "[Smart Workspace](https://www.dropbox.com/smart-workspace)."
>     
> 8.  Alibaba Cloud. "[Alibaba Cloud](https://us.alibabacloud.com/?utm_key=se_1007723047&utm_content=se_1007723047&gclid=Cj0KCQjwpcOTBhCZARIsAEAYLuXtVfyDA07daNnrjakhD4G1gEWRV3DNxD4alMD1PePu0bOKoNknGvUaAhUTEALw_wcB)."