What is cloud computing and how does it work?

While it might sound like yet another example of technical jargon, in reality the meaning of ‘cloud computing’ is quite straightforward. Simply put, it’s the on-demand delivery of IT resources via the internet.

Read on to learn more about cloud technology and how it can help your small business.

What is cloud computing?

Cloud computing is a digital service your small business can use to gain access to things such as:

• data and databases

• storage space

• computing power

Because everything is stored online – on a remote server rather than a physical piece of hardware –you have access to the cloud from anywhere that has an internet connection.

So no matter what size of business you operate, or what budget you have, you can access unlimited computer power and storage capacity, anytime, anywhere.

In past times, a lack of infrastructure was so often a barrier for small businesses when competing with their larger competitors. Now, however, being able to take advantage of cloud software has levelled the playing field.

What types of cloud computing are there?

Generally, there are three types.

1. Infrastructure as a Service (IaaS)

Think of IaaS as a virtual data centre. Your servers, networks, operating systems and data storage are all online, in the cloud, and made available to you via software. Amazon Web Services (AWS), Microsoft Azure and Google Compute Engine (GCE) are some common examples of IaaS.

With IaaS, your business can buy the resources it needs whenever it needs them, rather than having to buy hardware and software outright.

Common uses for IaaS include:

• customer-facing websites

• business software and apps

• data storage

• data backup and recovery

2. Platform as a Service (PaaS)

A PaaS provider (AWS, for example) gives you access to a complete platform – hardware, software and infrastructure – so you can develop, test, run and manage apps.

Having this entire platform in the cloud means you don’t have to house any computer equipment on your premises or wrestle with typical IT issues involving resources, capacity, installing and updating software, and so on.

3. Software as a Service (SaaS)

With SaaS, you’re simply using a piece of software that the provider runs, manages and updates. In most cases, you sign up to the service through the website then access the program on your web browser.

Some examples include:

• Salesforce

• Dropbox

• Office 365

• QuickBooks

• Amazon Web Services

SaaS is particularly beneficial for small businesses with e-commerce websites. It can allow you to get on with running your site without having to dedicate time to dealing with potentially troublesome and expensive technical issues.

How is cloud computing different to having physical servers?

In the words of Amazon Web Services: “No matter your location, size or industry, the cloud frees you from having to use infrastructure and a data centre, so you can focus on what matters most to your business.”

Not having to worry about investing large sums of money in hardware – and often overpaying for capacity that goes unused – means your business can trade its capital spending for variable spending. In other words, you’re only paying for your IT when you need it. It’s essentially a pay as you go service.

What is cloud storage?

Cloud storage is a service that allows you to keep your digital data on the internet. The data is stored on the cloud storage provider’s servers and you can access it at any time, from any device with an internet connection.

Many providers now have mobile apps you can use for this purpose, making the whole process really straightforward.

Relevant resources

• How to smartly use cloud accounting apps

• Is it time to switch to cloud accounting software?

• Lunch and Learn: The benefits of cloud accounting