What is Cloud Computing?

Everyone is talking about “the cloud.” But what does it mean?

The past 10 years have seen a shift of IT operations from in-house servers, software, and resources towards cloud technology. What’s more, this trend will only gather momentum over the next 10 years. The four key factors that drive this shift towards cloud computing include mobile connectivity, cost efficiency, shorter innovation cycles, and better data security.

So what is cloud computing? You can look at it as the outsourcing of hardware, software, data storage, and data processing. Users access applications and files by logging in from any device that has an internet connection. A network of secure data centers run by a third party store your data. Hence, this increases the processing power available and allows the sharing of data and between the users. Finally, it allows secure access from any location and on any device.

Cloud computing is the most efficient way of using computing resources. For a start, it removes investment in expensive hardware, license costs, and the human resources to maintain an in-house platform. Since cloud services are subscription-based — users only pay a monthly fee instead of buying licenses. The software and the hardware platforms are managed by a third-party provider who guarantees a 99.999% up-time. In addition, you get the dual benefits of an updated environment and unlimited computing power. Finally, with cloud computing, multiple users can access a program or file and work together in real-time from different locations.

Life before cloud computing

Younger workers might find it hard to imagine that there was a time when employees could only access work files, messages, and systems from a terminal at the office that was connected to other computers in the network via physical cables. Besides, each computer required the manual installation of software.

Cloud computing has evolved the IT environment into a new landscape.

  • Large servers — Businesses no longer need to invest in banks of expensive servers that require specialized ventilation and cooling.
  • Dedicated in-house IT support — With cloud computing, maintaining the IT platforms, and ensuring up-time is the responsibility of the third party. Hence companies no longer need high-cost tech staff to the in-house hardware and software running smoothly. Besides, you no longer need to update individual computers.
  • Data storage devices — Employees don’t have to manually back up data on hard drives, discs, or external devices.
  • Limited geographic access — Employees and managers are no longer tethered to the office. Mobility access allows them to be just as productive when traveling or working remotely as they can from the business’ headquarters.
  • Software obsolescence — Software updates of important programs required both major expenditure and manpower time to upload the updates. Only large enterprises could hire developers to create customized software. Bugs and security problems might go unaddressed for years.
  • Information loss — Managers feared that an emergency or natural disaster could wipe out all of a company’s records. Data stored on office computers was vulnerable to loss due to failure as well as theft due to hacking. However, data stored in the cloud has multiple safeguards.
  • Duplicate versions of documents — Cloud computing has eliminated the duplication of data. Cloud-based files with shared access are always up-to-date. All users are viewing the same thing and working with the same information.

Cloud computing: A better way

Cloud computing eliminates the problems of managing your in-house hardware and software platforms while providing flexibility, mobility, speed, and security. An experienced vendor like Renesent takes over these responsibilities. Besides, shared infrastructure is a utility wherein you only pay for what you use. Upgrades are automatic, and scaling up or down is easy.

Cloud-based apps have a shorter development time and they cost less to boot. Here are some reasons why cloud computing is a better alternative.

  • Accessible from anywhere — Mobile access to applications and data means you can work from anywhere and on any device. This enables real-time collaboration by teams on the go.
  • Flexible and scalable — Cloud-based applications are customizable to the user’s needs. Besides, the user can easily increase power, storage, and bandwidth availability.
  • Cost-effective — Because you only pay for what you use, there are no fixed license costs. Besides your hardware is not using electricity 24×7.
  • Hassle-free updates — The cloud provider ensures that the software is constantly updated. Besides, they also handle maintenance, backup, and troubleshooting.
  • Speed — The global networks of secure data centers are constantly upgraded for maximum efficiency and performance.
  • Secure — Your data is neither vulnerable to natural calamities like floods, and fire, nor to hardware failures. A regular updating of the advanced security protocols ensures the security of your data.

Businesses are running all kinds of apps and for many purposes in the cloud, like customer relationship management (CRM), human resources, accounting, and much more. Renesent is one of the leading pioneers in delivering cloud-based software.

The origin of the cloud

The first commercial computer, the UNIVAC I, hit the market in 1951 at a whopping cost of  $159,000 in today’s dollars. United States government and large corporations, were its first customers. UNIVAC I’s price tag, along with its large size, electricity consumption, and maintenance cost made it commercially unviable.  

In the early 1960s, a solution called remote job entry (RJE), allowed users to operate computers from remote locations. Hence, for the first time, a person did not have to be in the presence of the computer to operate it. Besides, it also allowed multiple users to simultaneously use the same machine.

In the mid-1960s, computer scientist J.C.R. Licklider developed the concept of a computer network. While working for ARPA (Advanced Research Projects Agency), he came up with the idea of an “Intergalactic Computer Network” that would allow multiple computers to communicate with each other.

Technological developments in the 1970s and 1980s saw the use of the cloud in different forms. Cloud computing was first used in 1996 in a business plan presentation by Compaq Computer Corporation.

The new cloud-based software did not have to be installed on every computer in a company’s inventory, besides it was also a much cheaper alternative.

Amazon developed a cloud-based application to manage its internal operations around the mid-2000s and offered the first cloud-based system for commercial use in 2006.

By the late 2000s, Google had released Google Docs, a cloud-based word processing software, as a free service. Google Sheets, Slides, and Forms soon followed.

The cloud continues to evolve, and Renesent continues to be a leader in the remote delivery of computing solutions for businesses.

Commonly asked questions about Cloud Computing

  • If it’s not on my computer hard drive, where is my information stored?
    • Your information is housed in a network of servers. Major providers such as Google, Microsoft, and Apple maintain server farms around the world to avoid a single point of failure.
  • What can businesses use the cloud for?
    • The cloud is used to back up data, deliver software, and provide extra processing capacity in a secure, scalable way. Cloud-based services are used for processes like accounting, inventory control, human resources, and customer relationship management.
  • Why is the cloud better than the systems already in place?
    • The cloud is cost-effective. Cloud computing eliminates the need for large capital investments in infrastructure and shifts costs to the operating budget. It is convenient, providing easy access to data for workers and managers regardless of location. Finally, it is secure, with vendors typically handling security, backups, upgrades, and maintenance.
  • When shifting to the cloud, what are some things businesses should do to prepare?
    • Cloud services are delivered over the internet, so it’s important to have fast, reliable, secure service with enough capacity to accommodate your business’ needs. Bandwidth is a core component of cloud services. If your network specs are insufficient, consider upgrading.
  • Is the cloud secure?
    • Although no system is completely foolproof, cloud data is probably more secure than information stored on conventional hard drives. With hard drives, information can easily be lost or corrupted. With cloud services, information is encrypted and backed up continuously. Vendors monitor systems carefully for security vulnerabilities.
  • How is data accessed once it’s stored on the cloud?
    • This will vary depending on what servers you use, but access is generally based on login credentials and user permissions.

Three types of cloud computing

  • Cloud computing delivers technology resources to users from remote hubs. There are three main models of cloud computing based on the type of resources being delivered. Software as a service (SaaS) delivers fully functional products to the end-users. Infrastructure as a service (IaaS) provides storage capacity and a secure network to system administrators. Finally, Platform as a service (PaaS) lies somewhere in between, it gives developers the building blocks to create customized apps while freeing them from tedious back-end functions.

Software as a Service (SaaS)

SaaS is the most frequently used type of cloud computing. It delivers ready to use applications over the internet. Maintenance and troubleshooting are the responsibility of the third-party vendor.

Besides, each software program performs a specific function and is intuitive to use. Examples include Microsoft Office 365 products, Google Apps, QuickBooks, Dropbox, Zendesk, and Slack. These are fully functional tools that can be further customized to the users’ needs. Besides, SaaS provides the highest level of customer support.

Infrastructure as a Service (IaaS)

IaaS is an open-ended cloud service for organizations that need to do a lot of customization themselves. Another benefit of IaaS is the availability of extra capacity, based on long-term or short-term needs.

With IaaS, the vendor provides the IT infrastructure, including hardware, servers, firewalls, and storage capacity. Meanwhile, the users bring their own operating systems and middleware. The client uses dashboards or an API to access the cloud servers. IaaS is fully self-service.

Platform as a Service (PaaS)

PaaS provides the user access to building blocks for software creation. With PaaS, the vendor handles back-end processes like security, infrastructure, and data integration. Thereby allowing the users to focus on building, hosting, and testing apps faster and at a lower cost.

Public, private, and hybrid clouds

  • In general, there are three major types of platform services. Each platform service is either public, private, or a hybrid mix of the two.

    • Public PaaS A public platform service is cloud-based, and its vendor manages and maintains the infrastructure.
    • Private PaaS, Meanwhile, a private platform service resides in onsite servers or private networks and maintained by the user.
    • Hybrid PaaS The hybrid platform uses elements from both public and private platforms. Hence, it is capable of running applications from multiple cloud platforms.

    Some important considerations while choosing a PaaS solution include ease of integration with existing information systems, the programming languages it supports, and the application-building tools it offers. Of course last but not least you have to evaluate the quality of support offered by the provider.

Glossary: The anatomy of business cloud computing

    • Customer relationship management (CRM): CRM or customer relationship management is a strategy for managing an organization’s relationships and interactions with customers and potential customers.
    • Public cloud: A public cloud is generally thought of as simply the cloud. This type of cloud is available to the public and is provided by a third party.
    • Private cloud: The organization that uses a private cloud owns and operates it. For instance, the organization could be a corporation or a university. Private clouds are not accessible to the public.
    • Hybrid cloud: A hybrid cloud uses both a private cloud and a public cloud for its computing needs.
    • Multicloud: Under a multi-cloud, the user or organization uses multiple clouds from various third parties.
    • Authentication mechanisms: These include the various ways users can prove their identities to gain access to systems or programs, for instance, username and password
    • Single sign-on (SSO) authentication: This provides users with access to multiple services with one login method.
    • Federated authentication: This is similar to SSO, but federated authentication verifies a user’s identity across more than one network or organization based on agreed-upon security standards.
    • Virtual machine (VM): A virtual machine is a program that mimics the functions of an actual computer. For example, a VM could be the Windows operating system functioning within the operating system of a MacBook, or vice versa. Multiple VMs can operate on a single server, mimicking multiple computers simultaneously.
    • Front end: This includes data and dashboards that are visible to the user and clients.
    • Back end: This is the data, coding, and infrastructure that operates applications or websites. It works behind the scenes.
    • Service level agreement (SLA): An SLA is a contract between a business owner and a cloud services provider that serves as a blueprint and a warranty.

Applications of cloud computing

    • Most consumers and businesses are already using the cloud, whether they realize it or not. If you stream music, shop online, have social media accounts, or use mobile banking, you’re using the cloud.

      Entertainment  — Movies and music are now accessed through cloud-based streaming services like Netflix or Spotify.

      Social media — The cloud stores all your photos and comments that you post on Facebook, Instagram, Twitter, and other social platforms.

      Documents, spreadsheets, and slide presentations — Files are now commonly kept in the cloud (think of Google Docs and Dropbox), accessible from anywhere and recorded in real-time.

      Mobile banking — Most major banks like Chase, Wells Fargo, and Bank of America all rely on the cloud. Transactions are searchable, and statements are stored in the bank’s database, accessible on-demand, eliminating the need for paper files.

      Customer relationship management — Customer relationship management (CRM) software enables businesses to personalize communications with customers. Intelligent software can send follow-ups such as cart abandonment emails.

      Human resources and payroll — Cloud computing enhances human resources functions. Hence, businesses see an increase in productivity and lowering costs. Tasks like recruiting, onboarding, and employee data management are all more efficient.

      Accounting — Cloud-based accounting applications do similar things as desktop accounting software, but they run on remote servers. The benefits include integration across departments so that all stakeholders have access to instantly updated figures and projections. Cloud accounting applications streamline data entry, eliminate redundancy, and reduce the chance of errors.

      Inventory management and logistics — Ordering, stocking, selling, and delivering goods are much more efficient with cloud-based inventory management. Vendors, managers, and logistics coordinators can see inventory levels and know where products are in real-time.

The advantages of cloud computing

    • Over the past two decades, cloud computing has become a staple in business and private life. As tech-savvy businesses can attest, there are many benefits of cloud computing. Among the most important benefits, cloud computing is:


      Cloud computing centralizes information for fast and efficient storage and retrieval. Besides, the data is readily accessible to all stakeholders.


      It allows for customization of programs and applications while allowing the owners control over the core code.


      Cloud software provides the opportunity to provide personalized applications and platforms to multiple users at the same time.


      Because third parties host the cloud systems, businesses and other users have greater assurance of reliability, and when there are problems, they have easy access to customer support.


      With cloud software, it is easy to scale up your operations at a minimal cost.


      Cloud computing can also guarantee a more secure environment, thanks to increased resources for security and the centralization of data.


How to have a best-in-class cloud

    • When it comes to cloud computing, best practices for businesses start with screening potential vendors carefully. Your network is only as good as the providers you work with.

      1. Choose cloud service providers wisely.

      Reputation matters when choosing a provider. Top-notch cloud service providers have multiple data centers that are geographically dispersed. This provides defense against natural disasters and geopolitical turmoil.

      2. Negotiate the terms of your service level agreement (SLA).

      A cloud service level agreement is a contract, blueprint, and warranty all rolled into one. Take care to define key terms and define the roles and responsibilities of all parties. Your agreement should spell out:

      • Where your data is located
      • Who owns the data
      • What data controls are in place
      • How your data is protected in transit
      • How your data is protected once it’s in the cloud
      • Who in the service provider’s organization has access to different types of data
      • Well defined password policies and authentication procedures.

      3. Optimize your security.

      Before entering into a relationship with a cloud service provider, it’s important to evaluate your current IT security controls and vulnerabilities. Then review the vendor’s security and data protection policies. Look for suppliers with certifications like ISO 27001, ISO 27017, DoD IL4, HIPAA, and the UK’s Cyber Essentials. Renesent has all of these accreditations and many more.

      4. Protect your data.

      Ensure the classification of your data based on sensitivity and restrict access accordingly. Handle tiers of data based on how much risk unauthorized disclosure would present to the company and affected users.

      5. Monitor your cloud services rigorously.

      It is important to monitor your cloud services rigorously. Most problems are much easier to solve if caught early. Unusual spikes in activity can alert you to security threats.

Accommodating growth over time

    • One of the biggest advantages of cloud computing is its flexibility to scale up or down as needed. As your business grows, you can add bandwidth, add users, add services, or add more cloud service providers. You do not have to make large investments in infrastructure to achieve growth. However, it’s a good idea to review your architecture from time to time to make sure that your systems are working efficiently.

Start growing with Renesent today

Get latest offers directly on your inbox!


support Call us today at (415) 212-5211 or email us at support@renesent.com