What is cloud computing, what is it for, and how to use it?

Cloud computing has become an integral part of our digital lives, often without us realizing it. Every time we store a photo on Google Drive, stream music, or access webmail, we’re using cloud-based services. But the cloud isn’t just an ally of the average user: it has become a cornerstone of the global technology infrastructure.

Today, cloud computing is one of the fastest-growing digital sectors, with a market that has surpassed $800 billion and is increasingly widespread among companies of all sizes and industries. Its strength lies in the ability to access remote computing resources such as computing power, data storage, and software platforms in a flexible and scalable way.

Businesses are adopting the cloud for a wide range of needs: from simple data backup to corporate email management, from software development to big data analysis. Some industries leverage it particularly strategically: automotive manufacturers, for example, use the cloud to offer personalized customer experiences, while financial services companies use it to power increasingly sophisticated fraud detection systems.

In a context where artificial intelligence, the Internet of Things, and cybersecurity play an increasingly central role, the cloud is no longer just a technological option, but a genuine necessity to innovate, adapt, and remain competitive. Here’s everything you need to know.

Understanding what the cloud is and how it’s used today means better understanding the present and anticipating the future of digital transformation.

What is cloud computing? Meaning and definition

What exactly do we mean by cloud computing? According to the National Institute of Standards and Technology (NIST):

Cloud computing is a model that enables ubiquitous, convenient, and on-demand access to shared, configurable computing resources.

It therefore represents a model for delivering IT services over the Internet. It is a paradigm that allows access to shared computing resources (servers, storage, applications, and services) that can be rapidly provisioned with minimal user management effort. This technology has radically transformed the way organizations manage their IT infrastructures, moving from physical hardware solutions to virtual services that are available on a pay-as-you-go basis.

The Necessary Requirements for Cloud Computing

According to the National Institute of Standards and Technology (NIST), cloud computing must meet five characteristics.

• On-demand access: Users must be able to request the resources they need autonomously without having to contact the provider each time.
• Broad network access: Access to cloud computing must be via the Internet, not through other technologies or protocols. Using standardized methods ensures that all users have seamless access to the service.
• Pooled resources: Combining multiple computing instances is the basic prerequisite for cloud computing. This is usually done in the form of server farms, i.e., locations where numerous servers are located. These serve to simultaneously provide computing power and storage capacity to multiple users.
• Elasticity: The allocation of computing capacity must be fast and aligned with demand. At best, specific automations activate or deactivate resources without customer or employee assistance.
• Measurable service: Cloud usage is monitored at all times. This provides greater transparency for both the provider and the user.

Different types of cloud computing

When discussing cloud computing, however, it is necessary to distinguish between the various types and the services offered. There are four types: public cloud, private cloud, hybrid cloud, and multicloud.

Public cloud

The public cloud is defined as a set of computing services offered by a provider over the Internet, made available to those who wish to use or purchase it. These services can be free or paid.

Compared to the private cloud, the public cloud allows companies to save on numerous maintenance management costs. This is because, since the cloud is public, the provider takes care of these aspects.

Although it is often labeled as less secure than its private equivalent, the public cloud, when used correctly, guarantees the same level of security but at much lower costs.

Private Cloud

Private cloud refers to services offered over the Internet only to selected users and not to the general public, as is the case with the public cloud.
Private cloud computing offers many of the advantages of a public cloud, such as self-service, elasticity, and scalability capabilities.

The private cloud also offers a high level of security and privacy to ensure that sensitive operations and data are not accessible to other providers.
The disadvantage is that the company’s IT department is considered responsible for the costs and management of the private cloud. Consequently, these require the same staffing, management, and maintenance costs as traditional proprietary data centers.

As you might imagine, even comparing them, it’s impossible to draw a definitive conclusion about which solution is best, whether public or private, as it depends largely on the business needs.

For a small business, such as a typical Italian SME, shouldering the installation and maintenance costs of a private cloud could be excessively expensive and sometimes unnecessary (unless you have a well-founded fear that someone might try to steal your confidential information).

A public cloud would be more suitable, as it’s quick to install, has a lower cost (unless you choose a free option), and, above all, doesn’t require direct maintenance by the user.

If a large company needs a cloud service, it might find it more convenient to have its own private cloud. Specifically, this may occur if the company is very large and produces a huge amount of data; or if the data it processes is particularly sensitive and at risk of theft.

In this case, even if the company considers this option, the cost would not significantly impact its revenue, making it an alternative worth considering.

Hybrid Cloud

But there is also a third option. A hybrid cloud is a solution that combines a private cloud with a public cloud service. A hybrid cloud strategy offers companies greater flexibility by moving workloads between cloud solutions based on needs and costs.

A hybrid cloud service is extremely powerful because it offers greater control over your private data. An organization can store sensitive data on a private cloud or a local data center while simultaneously leveraging the computing resources of a managed public cloud, managing everything from a single device.

An example of this could be a hospital that wants to store patient data locally so it can always have it available, while transferring less healthcare-related data, such as supply accounting, to the public cloud. This maximizes the capabilities of both systems while also reducing the financial impact.

Multicloud

The final solution is multicloud. Multicloud computing refers to the simultaneous use of multiple cloud computing services, provided by multiple providers, rather than just one.

There is a substantial difference compared to the hybrid cloud: while the latter uses different types of clouds (for example, a public and a private one), the multicloud uses multiple providers.

The reason why some companies use these different clouds is inherent in their characteristics: being able to use multiple providers allows them to complement each other. Furthermore, if a problem occurs, such as a failure, being able to rely on multiple clouds means work doesn’t have to stop.

How is cloud computing used in companies? The different service models

Companies implement cloud computing through three main service models, each suited to specific needs and with different levels of control over the underlying technology. These models represent practical solutions for modernizing IT infrastructure and optimizing business processes.

IaaS

The first level of infrastructure is Infrastructure-as-a-Service (IaaS). This service offers an initial level of delegation of data management. It provides infrastructure services such as computing resources and storage space via the cloud and the Internet.

With this service, the user has complete control over the infrastructure through an application programming interface (API) or a dashboard.

Infrastructure-as-a-service offers great versatility, allowing you to purchase only the components you need, adding or removing them as needed. Finally, it is highly cost-effective thanks to its low fixed cost and zero maintenance.

IaaS also presents some drawbacks, such as potential issues related to the reliability of the services and the security of the provider. However, these issues can be avoided by choosing a provider with a good reputation, proven experience, and a solid reputation.

PaaS

The second level of service is Platform-as-a-Service (PaaS). This service, through a prepackaged combination of cloud computing software and hardware, allows you to develop, test, manage, and distribute your applications with ease.

With this service, companies avoid the expense and complexity of purchasing and managing software licenses, middleware and underlying application infrastructure, development tools, and other resources.

SaaS

The third and final level of service is Software-as-a-Service (Saas). Of the three cloud computing services mentioned so far, this is the most comprehensive. It consists of a provider providing a complete application via a web browser.

The provider handles software updates, bug fixes, and other software maintenance tasks, while the user connects to the application via a dashboard.

By choosing this type of solution, companies do not have to manage installation and updates of the software, but simply customize the service according to their needs.

The advantages offered by this service in terms of time and maintenance can, however, be offset by issues related to control, security, and performance. Therefore, it is important to choose a highly reliable provider and train your staff to use these tools.

Costs and Payment Models in the Cloud

The economic structure of cloud computing is based on flexible payment models that adapt to different business needs. Unlike traditional IT infrastructure investments, the cloud introduces a financial paradigm that transforms capital expenditures (CapEx) into operating costs (OpEx), radically changing the financial management of organizations.

Pay-as-you-go: Pay only for what you use

The pay-as-you-go model is one of the most advantageous features of cloud computing. This approach allows companies to pay only for the resources they actually use, eliminating the costs of overbuilt infrastructure. According to the main market offerings, there are different consumption-based pricing models:

• on-demand: Organizations pay exactly for what they use, often with rates calculated by the hour, minute, or even second;
• preemptible: Some providers offer heavily discounted instances that can be interrupted when the capacity is needed elsewhere;
• reserved: Companies reserve compute capacity in advance to obtain more advantageous rates.

This model gives organizations the flexibility to scale their cloud infrastructures as their needs change, keeping costs under control.

Monthly or Annual Subscription

As an alternative to pay-as-you-go, many cloud providers offer fixed-rate subscriptions, with monthly or annual payments. This solution is particularly popular for SaaS services and is adopted by companies with predictable workloads. The prepaid model offers:

• fixed and predictable rates regardless of actual usage;
• significant discounts for long-term commitments or volume purchases;
• less flexibility than pay-as-you-go, but easier budgeting.

Many providers also allow you to combine both approaches to manage both predictable and unexpected loads.

Difficulty in forecasting costs

Despite the clear advantages, financial management in the cloud presents significant challenges.

A study by the FinOps Foundation revealed that one in five companies has no control over cloud costs, while over 35% of organizations have experienced higher-than-expected cost fluctuations.

Key challenges include:

• Data egress fees: Some providers charge high fees when data leaves their network, potentially "stranding" data in the cloud environment;
• Hidden costs: Inter-zone transfers, API calls, and internal traffic between servers can generate unexpected expenses;
• Optimization challenges: An estimated 20% to 30% of cloud spending is wasted through duplication and inefficiencies.

Original article published on Money.it Italy. Original title: Cos’è il cloud computing, a cosa serve e come si usa