What is Cloud Computing?

Characteristics of Cloud Computing

There is no clear definition for cloud computing, or at least, there are technical limitations to cloud computing in some contexts. Requirements, surrounding systems and the budget determine the scope of a cloud project. The National Institute of Standards and Technology (NIST) in the US provides global, technology-driven standardisation processes on a regular basis. According to the NIST, “Cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.”

Source: NIST

Requirements Supporting a Cloud Solution

  • On-demand availability

  • Flexible network access (LAN, WIFI, VPN – regardless of device)

  • Large and diverse pool of resources

  • High flexibility, scalability and elasticity*

  • Measurable performance (pay-per-use)

*In cloud computing, IT experts distinguish between scalability and elasticity. The latter stands for a dynamic response to volatility in supply and demand. Cutting-edge cloud service providers not only offer on-demand services, but they are also capable of adapting them quickly to current demand. This means that customers and service providers can discontinue or individually adapt services with just a few clicks or even automatically.

Scalability, on the other hand, refers to services being able to switch over from larger to smaller computer systems and vice versa. The development in hardware today allows for much faster switching cycles – thanks to new hardware or technology which, for example, can deliver the same performance with less storage/fewer CPU cores. The providers save on hardware resources and customers pay lower licence fees.

What Can You Do With Cloud Computing?

  • Provide development and testing environments for application development

  • Host scalable, highly available services: business applications, photos, streaming, office/email apps, websites, messenger apps, gaming

  • Provide flexible computing and storage capabilities for various fields of applications such as data analysis, simulations, research

What Types of Cloud Computing Are There?

The most common resources in cloud computing are public, private, hybrid and edge.

Public Cloud

A public cloud makes services available via the internet. This includes IT infrastructure, applications, storage and computing power. It also includes special services such as satellite communication (Amazon Web Services). Technologies in the field of quantum computing, machine learning and the Internet of Things (see also: edge computing) complete the technological portfolio. Companies and/or users usually do not need to install the required software. The hardware, which is usually a virtual machine, is also part of the contract. Bear in mind: In a public cloud, all services and related features are available to all customers. Upon request, data storage can be decentralised and distributed across various locations. The advantage of this storage model is that the provider ensures replication. Keeping several copies improves data security and, depending on the location, also the response time when the information is requested.

All services of the public digital cloud are available under the different licence models or categories below.

Public Cloud Services/Licence Models

  • SaaS – software as a service: This model makes software and the required infrastructure available via the internet. Examples: Content management systems such as Contentful and Sitecore, shop systems such as SAP Commerce and Spryker, Microsoft Office 365, Salesforce CRM and Akeneo PIM.

  • PaaS – platform as a service: This is a platform where a provider makes a development environment and tools for the development of new applications available. The most common services run on Amazon Web Services (AWS), Google App Engine (GAE), Microsoft Azure and Salesforce Forces.

  • IaaS – infrastructure as a service: This model is about providing infrastructure such as networks, servers, storage as well as virtualisations. Conventional components such as an operating system or applications require additional installation by administrators. Providers of IaaS guarantee smooth performance and high availability and handle hardware issues. The provider is in charge of repairing and replacing any faulty components while the contracting partner has sovereignty over the installed software.

The top cloud computing providers are listed in the Gartner Magic Quadrant for Cloud Infrastructure and Platform Services every year (2020).

Private Cloud

The private cloud essentially provides the same services as the public cloud. Cloud infrastructure and information/data are, as a rule, not available via the internet but locally via VPN. As opposed to the public cloud, access is usually limited to one company. For private users, this licence model is usually too expensive. Private cloud solutions enable operation in a company’s own data centre or at the service provider. From a technological point of view, this means that in a private cloud, the software is separated from other cloud instances visually and virtually, and the hardware also physically.

Hybrid Cloud/Multi Cloud

Public and private cloud resources can also be combined. The so-called hybrid cloud enables a mix of data transfers and applications from both worlds. This means that the hybrid cloud provides the infrastructure, security and compliance flexibility companies are demanding. The challenge here is that a hybrid environment requires high-performing connectivity. IT and cloud services must be harmonised across geographical borders. For companies, the hybrid licence model is a good starting point for their own digitalisation. “In almost all cases, the hybrid cloud is the first step towards the public cloud, because the existing infrastructure is then moved to the public cloud step by step”, says Marco Mannoni from netzwoche magazine.

Edge Computing

Edge computing is all about decentralised data processing, figuratively speaking on the edge of a cloud network. It relies exclusively on high-performant connectivity (see: hybrid cloud). Edge computing is a type of intermediate layer between the data centre (cloud) and data processing devices. It is usually a key technology for the Internet of Things, also called IoT. It helps lighten the load of conventional computing systems and keeps latencies low.

Edge Computing in Practice

IoT-capable devices produce huge volumes of data with their sensors. Some of it is real-time data for immediate use. This includes critical data from planes, cars and industrial plants. Other datasets are intended for later analysis and statistics (potentially critical data). The analysis and processing of real-time data is carried out where the data is generated. Data is initially stored locally, for instance, in production robots, but use cases such as speech recognition, routing (Google Maps), firewalls and radar sensors also rely on local processing of real-time data. All other data is automatically fed to the cloud.

“These data volumes can neither be uploaded to the cloud nor analysed in real time via mobile networks. Additionally, using third-party networks comes at a high price. This is why you need to determine locally how much of the generated information and what information is transmitted to central systems and stored there and which data can be analysed locally.”

Source: IONOS Digital Guide germany

Data Examples – Data Volumes for Real-time Analysis

  • A semi-autonomous car generates more than 6 terabytes of data per day. That equates to more than 4 gigabytes per minute.

  • Intelligent factories generate 1 petabyte of data per day on average.

  • Planes generate up to 20 terabytes per hour.

  • Oil rigs generate 500 gigabytes per week.

Cloud Computing – Outlook

According to Seagate germany, we will generate 175 zettabytes of data in 2025. Close to 30 per cent of data generated across the world will then fall under edge computing. CERN alone generates more than a petabyte of collision data per second. Only a fraction of that data is saved. Smartphones keep increasing the accuracy of map services thanks to real-time routing. Globally, they are now processing 20 to 30 petabytes per day.

Summary of the Advantages and Disadvantages of Cloud Computing


  • User-specific sharing of documents and media

  • Editing documents together

  • Easier exchange of data (vs. flash drives)

  • Different devices and clients/browsers

  • High level of IT security

  • Cutting and/or shifting personnel costs (CPD, maintenance, preventive measures and updates are up to the cloud provider)

  • Minimised capital commitment for hardware resources

  • Hardware and software/storage capacities scale

  • Branch offices and other locations are easy to integrate

  • High availability and fast connection


  • Investment in data privacy policies is required

  • Situational challenges when changing providers (vendor lock-in)

  • Possibly limited customisation due to standardisation

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