Cloud computing

by Chris Woodford. Last updated: July 5, 2024.

History has a funny way of repeating itself, or so they say. But it may come as some surprise to find this old cliché applies just as much to the history of computers as to wars, revolutions, and kings and queens. For the last three decades, one trend in computing has been loud and clear: big, centralized, mainframe systems have been "out"; personalized, power-to-the-people, do-it-yourself PCs have been "in." Before personal computers took off in the early 1980s, if your company needed sales or payroll figures calculating in a hurry, you'd most likely have bought in "data-processing" services from another company, with its own expensive computer systems, that specialized in number crunching; these days, you can do the job just as easily on your desktop with off-the-shelf software. Or can you? In a striking throwback to the 1970s, many companies are finding, once again, that buying in computer services makes more business sense than do-it-yourself. This new trend is called cloud computing and, not surprisingly, it's linked to the Internet's inexorable rise. What is cloud computing? How does it work? Let's take a closer look!

Photo: Cloud computing: the hardware, software, and applications you're using may be anywhere up in the "cloud." As long as it all does what you want, you don't need to worry where it is or how it works. Composite photo of computer (Tom Tschida) and clouds (unknown photographer), both courtesy of NASA.

What is cloud computing?

Cloud computing means that instead of all the computer hardware and software you're using sitting on your desktop, or somewhere inside your company's network, it's provided for you as a service by another company and accessed over the Internet, usually in a completely seamless way. Exactly where the hardware and software is located and how it all works doesn't matter to you, the user—it's just somewhere up in the nebulous "cloud" that the Internet represents.

Cloud computing is a buzzword that means different things to different people. For some, it's just another way of describing IT (information technology) "outsourcing"; others use it to mean any computing service provided over the Internet or a similar network; and some define it as any bought-in computer service you use that sits outside your firewall. However we define cloud computing, there's no doubt it makes most sense when we stop talking about abstract definitions and look at some simple, real examples—so let's do just that.

Simple examples of cloud computing

Screenshot: Soundcloud—one of my favorite examples of a website (and mobile app) that uses cloud computing to good effect. Musicians and DJs upload their music, which "followers" can listen to (or preview) for free through real-time streaming. You can build up a personal collection of tracks you like and access them from any device, anytime, anywhere. The music you listen to stays up in the cloud: in theory, there is only ever one copy of every music file that's uploaded. Where is the music stored? No-one but Soundcloud needs to know—or care.

Most of us use cloud computing all day long without realizing it. When you sit at your PC and type a query into Google, the computer on your desk isn't playing much part in finding the answers you need: it's no more than a messenger. The words you type are swiftly shuttled over the Net to one of Google's hundreds of thousands of clustered PCs, which dig out your results and send them promptly back to you. When you do a Google search, the real work in finding your answers might be done by a computer sitting in California, Dublin, Tokyo, or Beijing; you don't know—and most likely you don't care!

The same applies to Web-based email. Once upon a time, email was something you could only send and receive using a program running on your PC (sometimes called a mail client). But then Web-based services such as Hotmail (now rebranded "Outlook") came along and carried email off into the cloud. Now we're all used to the idea that emails can be stored and processed through a server in some remote part of the world, easily accessible from a Web browser, wherever we happen to be. Pushing email off into the cloud makes it supremely convenient for busy people, constantly on the move.

Preparing documents over the Net is a newer example of cloud computing. Simply log on to a web-based service such as Google Documents and you can create a document, spreadsheet, presentation, or whatever you like using Web-based software. Instead of typing your words into a program like Microsoft Word or OpenOffice, running on your computer, you're using similar software running on a PC at one of Google's world-wide data centers. Like an email drafted on Outlook, the document you produce is stored remotely, on a Web server, so you can access it from any Internet-connected computer, anywhere in the world, any time you like. Do you know where it's stored? No! Do you care where it's stored? Again, no! Using a Web-based service like this means you're "contracting out" or "outsourcing" some of your computing needs to a company such as Google: they pay the cost of developing the software and keeping it up-to-date and they earn back the money to do this through advertising and other paid-for services.

What makes cloud computing different?

It's managed

Most importantly, the service you use is provided by someone else and managed on your behalf. If you're using Google Documents, you don't have to worry about buying umpteen licenses for word-processing software or keeping them up-to-date. Nor do you have to worry about viruses that might affect your computer or about backing up the files you create. Google does all that for you. One basic principle of cloud computing is that you no longer need to worry how the service you're buying is provided: with Web-based services, you simply concentrate on whatever your job is and leave the problem of providing dependable computing to someone else.

It's "on-demand"

Cloud services are available on-demand and often bought on a "pay-as-you go" or subscription basis. So you typically buy cloud computing the same way you'd buy electricity, telephone services, or Internet access from a utility company. Sometimes cloud computing is free or paid-for in other ways (Outlook is subsidized by advertising, for example). Just like electricity, you can buy as much or as little of a cloud computing service as you need from one day to the next. That's great if your needs vary unpredictably: it means you don't have to buy your own gigantic computer system and risk have it sitting there doing nothing.

It's public or private

Now we all have PCs on our desks, we're used to having complete control over our computer systems—and complete responsibility for them as well. Cloud computing changes all that. It comes in two basic flavors, public and private, which are the cloud equivalents of the Internet and Intranets. Web-based email and free services like the ones Google provides are the most familiar examples of public clouds. The world's biggest online retailer, Amazon, became the world's largest provider of public cloud computing in early 2006. When it found it was using only a fraction of its huge, global, computing power, it started renting out its spare capacity over the Net through a new entity called Amazon Web Services (AWS). Private cloud computing works in much the same way but you access the resources you use through secure network connections, much like an Intranet. Companies such as Amazon also let you use their publicly accessible cloud to make your own secure private cloud, known as a Virtual Private Cloud (VPC), using virtual private network (VPN) connections.

Advantages and disadvantages of cloud computing

What's good and bad about cloud computing?

Advantages

The pros of cloud computing are obvious and compelling. If your business is selling books or repairing shoes, why get involved in the nitty gritty of buying and maintaining a complex computer system? If you run an insurance office, do you really want your sales agents wasting time running anti-virus software, upgrading word-processors, or worrying about hard-drive crashes? Do you really want them cluttering your expensive computers with their personal emails, illegally shared MP3 files, and naughty YouTube videos—when you could leave that responsibility to someone else? Cloud computing allows you to buy in only the services you want, when you want them, cutting the upfront capital costs of computers and peripherals. You avoid equipment going out of date and other familiar IT problems like ensuring system security and reliability. You can add extra services (or take them away) at a moment's notice as your business needs change. It's really quick and easy to add new applications or services to your business without waiting weeks or months for the new computer (and its software) to arrive.

Drawbacks

Instant convenience comes at a price. Instead of purchasing computers and software, cloud computing means you buy services, so one-off, upfront capital costs become ongoing operating costs instead. That might work out much more expensive in the long-term.

If you're using software as a service (for example, writing a report using an online word processor or sending emails through webmail), you need a reliable, high-speed, broadband Internet connection functioning the whole time you're working. That's something we take for granted in countries such as the United States, but it's much more of an issue in developing countries or rural areas where fiber broadband is unavailable. Even if your connection is rock-steady, what happens if the mission-critical cloud service you're using suddenly goes down for an hour or a day? Cloud outages, though rare, are not unknown—and they can plunge companies without a backup system into instant chaos. Outages like this intermittently plague all the major cloud-based services— Google, Facebook, Microsoft, Twitter, and TikTok among them—and come to our notice precisely because they cause such massive disruption. What if the downtime had been two days... or two weeks... or two months?

If you're buying in services, you can buy only what people are providing, so you may be restricted to off-the-peg solutions rather than ones that precisely meet your needs. Not only that, but you're completely at the mercy of your suppliers if they suddenly decide to stop supporting a product you've come to depend on. (Way back in 2012, Google upset many users when it announced that its cloud-based Google Docs would drop support for old but de facto standard Microsoft Office file formats such as .DOC, .XLS, and .PPT, giving a mere one week's notice of the change—although, after public pressure, it later extended the deadline by three months.) Critics charge that cloud-computing is a return to the bad-old days of mainframes and proprietary systems, where businesses are locked into unsuitable, long-term arrangements with big, inflexible companies. Instead of using "generative" systems (ones that can be added to and extended in exciting ways the developers never envisaged), you're effectively using "dumb terminals" whose uses are severely limited by the supplier. Good for convenience and security, perhaps, but what will you lose in flexibility? And is such a restrained approach good for the future of the Internet as a whole? (To see why it may not be, take a look at Jonathan Zittrain's classic book The Future of the Internet—And How to Stop It.)

Think of cloud computing as renting a fully serviced flat instead of buying a home of your own. Clearly there are advantages in terms of convenience, but there are huge restrictions on how you can live and what you can alter. Will it automatically work out better and cheaper for you in the long term?

Photo: Cloud computing: forward to the future... or back to the past? In the 1970s, the Apple ][ (above) became the world's first, bestselling small business computer thanks to a killer-application called VisiCalc, the first widely available computer spreadsheet. It revolutionized business computing, giving middle managers the power to crunch business data on their desktops, all by themselves, without relying on slow, centralized computer departments or bought-in data processing. Critics are concerned that cloud computing could be disempowering—a throwback to the 1970s world of centralized, proprietary computing in which lots of people "time-share" giant mainframe computers like the one below. Apple ][ photo by Rama published on Wikimedia Commons under a Creative Commons (CC BY-SA 2.0 FR) licence.

Photo: A mainframe computer. Photo courtesy of NASA on the Commons.

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Cloud computing trends

We've just had a quick and simple sketch of cloud computing—and if that's all you need, you can stop reading now. This section fills in some of the details, asks some deeper questions, looks at current trends, such as the shift to mobile devices, and explores challenging issues like privacy and security.

Growth

The figures speak for themselves: in every IT survey, news report, and pundit's op-ed, cloud computing seems the only show in town.

• Way back in 2008, the Pew Internet project reported that 69 percent of all Internet users had "either stored data online or used a web-based software application" (in other words, by their definition, used some form of cloud computing).
• In 2009, Gartner priced the value of cloud computing at $58.6 billion, in 2010 at $68.3 billion, in 2012 at over $102 billion, in 2017 at $260 billion, in 2022 at around $500 billion, and predicted it would exceed $1 trillion in 2027.
• Over the last decade or so, management consultants McKinsey and Company have regularly described cloud computing as a multi-trillion dollar opportunity (although exactly how many trillion varies from one media report to the next).
• In 2016, Amazon revealed that its AWS offshoot, then the world's biggest provider of cloud computing, had become a $10 billion-a-year business; by 2019, that figure had leaped to $25.7 billion—more than the entire revenue for the giant global McDonald's empire in 2018. By the end of 2023, Amazon's annual AWS revenue had reached an amazing $90.8 billion. Meanwhile, the Microsoft Cloud has quietly edged past AWS and into the lead, reporting $60.1 billion in revenue for 2021 and $111.6 billion in revenue for 2023.

Chart: Cloud surge: The rapid revenue growth of Amazon's AWS web business illustrates the broader growth of cloud computing.

A matter of definitions

So the numbers keep on creeping up and it's an exciting trend, to be sure. But there's one important word of caution: how you measure and forecast something as vague as "the cloud" depends on how you define it: if the definition keeps expanding, perhaps that's one reason why the market keeps expanding too?

Way back in the 1990s, no-one described Yahoo! Mail or Hotmail as examples of cloud computing, Geocities was simply a community of amateur websites, and Amazon and eBay were just new ways of finding and buying old stuff. In 2008, in its breathless eagerness to talk up cloud computing, the Pew Internet project had rounded up every web-based service and application it could think of and fired it to the sky. Wordpress and Blogger were examples of cloud blogging, Google Docs and Gmail were cloud-based, and suddenly so too were Yahoo! Mail, buying things from eBay and Amazon, and even (bizarrely) RSS feeds (which date back to the late 1990s). Using "the cloud" as a loose synonym for "the Web," then expressing astonishment that it's growing so fast seems tautologous at best, since we know the Internet and Web have grown simply by virtue of having more connected users and more (especially more mobile) devices. According to Pew, what these users prized were things like easy access to services from absolutely anywhere and simple data storing or sharing. This is a circular argument as well: one reason we like "the cloud" is because we've defined it as a bunch of likeable websites—Facebook, Zoom, Gmail, and all the rest.

Business benefits

Businesses have shrewder and more interesting reasons for liking the cloud. Instead of depending on Microsoft Office, to give one very concrete example, they can use free, cloud-based open-source alternatives such as Google Docs. So there are obvious cost and practical advantages: you don't have to worry about expensive software licenses or security updates, and your staff can simply and securely share documents across business locations (and work on them just as easily from home). Using cloud computing to run applications has a similarly compelling business case: you can buy in as much (or little) computing resource as you need at any given moment, so there's no problem of having to fund expensive infrastructure upfront. If you run something like an ecommerce website on cloud hosting, you can scale it up or down for the holiday season or the sales, just as you need to. Best of all, you don't need a geeky IT department because—beyond commodity computers running open-source web browsers—you don't need IT.

Spot the difference

When we say cloud computing is growing, do we simply mean that more people (and more businesses) are using the Web (and using it to do more) than they used to? Actually we do—and that's why it's important not to be too loose with our definitions. Cloud web hosting is much more sophisticated than ordinary web-hosting, for example, even though—from the viewpoint of the webmaster and the person accessing a website—both work in almost exactly the same way. This web page is coming to you courtesy of cloud hosting where, a decade ago, it ran on a simple, standalone server. It's running on the same open-source Apache server software that it used then and you can access it in exactly the same way (with http and html). The difference is that it can cope with a suddenly spike in traffic in the way it couldn't back then: if everyone in the United States accessed this web page at the same time, the grid of servers hosting it would simply scale and manage the demand intelligently. The photos and graphics on the page (and some of the other technical stuff that happens behind the scenes) are served from a cloud-based Content Delivery Network (CDN): each file comes from a server in Washington, DC, Singapore, London, or Mumbai, or a bunch of other "edge locations," depending on where in the world you (the browser) happen to be.

This example illustrates three key points of difference between cloud-based services and applications and similar ones accessed over the web. One is the concept of elasticity (which is a similar idea to scalability): a cloud service or application isn't limited to what a particular server can cope with; it can automatically expand or contract its capacity as needed. Another is the dynamic nature of cloud services: they're not provided from a single, static server. A third, related idea is that cloud services are seamless—whether you're a developer or an end user, everything looks the same, however, wherever, and with whatever device you use it.

Photos: Elastic and scalable: Amazon AWS Elastic Compute Cloud (EC2) allows you to set up a cloud server in a matter of minutes. With a couple of mouse clicks, you can resize your server (upgrade or downgrade the memory, for example) to cope with changes in demand—for example, in the run up to a Black Friday sale. Every aspect of the service is pay-as-you-go. It's easy to use even if you have little or no experience of setting up or managing dedicated servers.

Mobilization

One of the biggest single drivers of cloud computing is the huge shift away from desktop computers to mobile devices, which (historically, at least) had much less processing power onboard. Web-connected smartphones, tablets, Kindles, and other mobile devices are examples of what used to be called "thin clients" or "network computers" because they rely on the servers they're connected to, via the network (usually the Internet), to do most of the work. A related trend referred to as bring your own device (BYOD) reflects the way that many companies now allow their employees to logon to corporate networks or websites using their own laptops, tablets, and smartphones.

From the smartphone in your pocket to the mythical fridge that orders your milk, the number and range of devices connected to the Internet is increasing all the time. A new trend called the Internet of Things anticipates a massive increase in connected devices as everyday objects and things with built-in sensors (home heating controllers, home security webcams, and even parcels in transit) get their own IP addresses and become capable of sending and receiving data to anything or anyone else that's online. That will fuel the demand for cloud computing even more.

Photo: Mobile cloud: The shift to mobile devices and the growth of cloud computing are mutually reinforcing trends. Mobile devices are much more useful thanks to cloud-based apps like these, provided by Google. In other words, one reason for buying a mobile is because of the extra (cloud-based) things you can do with it. But these services are also thriving because they have ever-increasing numbers of users, many of them on smartphones.

How significant is the shift to mobile? By any measurement, phenomenal and dramatic.

• Bearing in mind that there was only one functioning mobile phone in 1973 when Martin Cooper made the first cellphone call, it's staggering to find that there are now around 9 billion mobile subscriptions (more than one for every person on the planet).
• By 2012, Goldman Sachs was telling us that 66 percent of Net-connected devices were mobiles, compared to just 29 percent desktops.
• Mobile Internet traffic finally overtook desktop traffic in 2014/15, according to Comscore and Statcounter.
• In response, Google rolled out a "mobile-friendly" algorithm in 2015 to encourage webmasters to optimize their sites so they worked equally well on smartphones. In 2018, Google began indexing the smartphone versions of websites in preference to the desktop versions with its new, so-called mobile-first index (a project it finally concluded in 2024).
• According to Forbes, mobile devices were forecast to represent half of all ecommerce shopping in 2022, though the rapid rate of growth has tailed off since then.
• Currently, mobile devices represent about 60 percent of ecommerce sales—a figure that's unlikely to rise much more.

Cloud computing makes it possible for cellphones to be smartphones and for tablets to do the sorts of things that we used to do on desktops, but it also encourages us to do more things with those devices—and so on, in a virtuous circle. For example, if you buy a smartphone, you don't simply do things on your phone that you used to do on your PC: you spend more time online overall, using apps and services that you previously wouldn't have used at all. Cloud computing made mobile devices feasible, so people bought them in large numbers, driving the development of more mobile apps and better mobile devices, and so on.

More types of cloud

Stare high to the sky and you can watch clouds drift by or, if you're more scientific and nuanced, start to tease out the differences between cumulus, cirrus, and stratus. In much the same way, computing aficionados draw a distinction between different types of cloud. Public clouds are provided by people such as Amazon, Google, and IBM: in theory, all users share space and time on the same cloud and access it the same way. Many companies, for example, use Gmail to power their Internet mail and share documents using Google Drive—in pretty much the same way that you or I might do so as individuals. Private clouds work technically the same way but service a single company and are either managed exclusively by that company or by one of the big cloud providers on their behalf. They're fully integrated with the company's existing networks, Intranet, databases, and infrastructure, and span countries or continents in much the same way. Increasingly, companies find neither of these bald alternatives quite fits the bill—they need elements of each—so they opt for hybrid clouds that combine the best of both worlds, hooking up their existing IT infrastructure to a public cloud system provided by someone like Amazon or Google. Other trends to watch include the development of personal clouds, where you configure your own home network to work like a mini-cloud (so, for example, all your mobile devices can store and access files seamlessly), and peer-to-peer cloud computing, in which the dynamic, scalable power of a cloud computing system is provided not by giant data centers but by many individual, geographically dispersed computers arriving on the network, temporarily contributing to it, and then leaving again (as already happens with collaborative science projects like SETI@home and ClimatePrediction.net).

Cloud concerns?

Security has always been an obvious concern for people who use cloud computing: if your data is remote and traveling back and forth over the Internet, what's to keep it safe? Perhaps surprisingly, many IT professionals think cloud-based systems are actually more secure than conventional ones. If you're buying into Google's, Amazon's, or Microsoft's cloud-based services, you're also buying into world-class expertise at keeping data safe; could you—or your IT team—manage security as well? Security can therefore be seen as a compelling reason to migrate to cloud-based systems rather than a reason to avoid them.

Privacy is a more nuanced and complex issue. While we all understand what we mean by keeping data secure, what do we mean by keeping it private in a world where users of cloud-based services like Facebook, Instagram, and Snapchat happily share anything and everything online? One of the complications is so-called big data, the statistical ("analytic") information that companies like Google and Facebook gather about the way we use their cloud-based services (and other websites that use those services). Google, for example, collects huge amounts of data through its advertising platforms and no-one knows exactly what happens to it afterward. Facebook knows an enormous amount about what people say they "like," which means it can compile detailed profiles of all its users. Amazon, meanwhile, knows what you buy, or think about buying, or dream about buying when you ever get the money. The quid-pro-quo for "free" web-based services and apps is that you pay for what you use with a loss of privacy, typically to power targeted advertisements.

Another complication is that privacy means different things in different parts of the world. In Europe, for example, the European Union has strict restrictions on how data can be moved in bulk from one country to another or shared by companies like Google that have multiple subsidiaries operating across countries and continents. While Internet-based cloud computing makes national boundaries obsolete, real-world laws still operate according to old-fashioned geography—and that could act as a serious brake on the aspirations of many big cloud providers. Europe's GDPR law, for example, forced many big Internet companies to think hard about how they collected and shared data—and obliged virtually every website to seek consent before it used cookies (temporary, web browser "memory" files).

No such thing as a free cloud?

When it comes to the everyday web services we all enjoy, there may be different kinds of clouds on the horizon. As web-based advertising dwindles in effectiveness, one future concern must be how companies like Google, Facebook, and TikTok will continue to fund their ever-growing, (essentially) cloud-based, services without using our data in increasingly dubious ways. Part of the reason for the huge growth in popularity of services like this is simply that they're free. Would Facebook be so popular if we had to pay for it through a monthly subscription? If Google Docs cost money, would we slink back to our desktop PCs and Microsoft Word? Can advertising continue to sustain an ever-growing field of cloud-based services and apps as the number of Internet users and Net-connected devices continues to grow? Watch this space!

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Books

There's a shortage of good, recently published books about the cloud; these slightly older titles are still useful and relevant, but the technical details might not be up-to-date.

• Cloud Computing: Concepts, Technology & Architecture by Thomas Erl and Eric Barcelo. Pearson, 2023. One of the most recent basic introductions.
• Mastering Cloud Computing: Foundations and Applications Programming by Rajkumar Buyya, Christian Vecchiola, and S.Thamarai Selvi. Elsevier, 2013. An introductory textbook for students and IT professionals.
• Cloud Computing Bible by Barrie Sosinsky. Wiley, 2011. A more detailed guide for managers and IT professionals who need to evaluate a move to the cloud.
• A Brief Guide to Cloud Computing: An Essential Introduction to the Next Revolution in Computing by Christopher Barnatt. Constable and Robinson, 2010. A simple overview that references lots of practical examples of cloud computing. A decent overview for people new to the subject that has pretty good reviews on Goodreads.
• The Rough Guide to Cloud Computing by Peter Buckley. Rough Guides/Penguin, 2010. A simple overview of 100 cloud-based sites you can try out, presented in the clear, no-nonsense, Rough Guide format.
• Cloud Computing for Dummies by Judith Hurwitz et al. Dummies, 2010. Although presented in the simple Dummies style, this is actually quite a detailed overview to help managers and professionals understand and evaluate the business benefits of cloud computing.

Articles

• China's Cloud Computing Firms Raise Concern for U.S by David McCabe, The New York Times, 21 June 2023. Are Chinese firms like Huawei and Alibaba about to clean up on the growing global market for cloud computing?
• Global Microsoft outage brings down Teams, Office 365 and Outloo by Josh Taylor. The Guardian, September 29, 2020. A major outrage reveals one of the major dangers of our growing reliance on cloud computing.
• Startup wants to upload your brain to the cloud, but has to kill you to do it by Alex Hern. The Guardian, March 14, 2018. Nectome has found a way to preserve your brain, but it's fatal—and, so far, it only works for rabbits and pigs.
• Someone Else's Computer: The Prehistory of Cloud Computing by David C. Brock. IEEE Spectrum, August 31, 2017. Cloud computing has its roots in 1960s and 1970s time-sharing.
• Microsoft Is Rewarded for Turning to the Cloud by Nick Wingfield. The New York Times, July 20, 2017. A strategic switch to service providing has powered the huge resurgence in Microsoft's fortunes.
• Behold the Cloud of Clouds: The Intercloud by Paul McFedries. IEEE Spectrum, November 21, 2016. Everyone's heard of cloud computing, but what about fog computing, dew computing, and the Intercloud?
• Escape From the Data Center: The Promise of Peer-to-Peer Cloud Computing by Ozalp Babaoglu and Moreno Marzolla. IEEE Spectrum. 22 September 2014. Cloud computing doesn't necessarily have to involve giant data centers; what if we could combine it with the ad-hoc, disruptive power of peer-to-peer?
• The Era of Cloud Computing by Quentin Hardy. The New York Times, June 11, 2014. Reviews recent trends and the march toward a cloud computing industry that could be worth as much as $5 trillion.