What is cloud computing?
Short answer
Cloud computing is the delivery of computing resources, such as servers, storage and software, over the internet on demand, usually paid for by use instead of bought as hardware. The largest providers run huge data centres.
The NIST definition
The US National Institute of Standards and Technology (NIST) describes cloud computing by five essential characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity and measured service. In practice this means a customer can start and stop resources in minutes and is billed for what it uses.
Service and deployment models
NIST names three service models and four deployment models.
| Model | Meaning |
|---|---|
| IaaS | Infrastructure as a service: virtual servers, storage, networks |
| PaaS | Platform as a service: tools to build and run applications |
| SaaS | Software as a service: finished applications used over the internet |
| Public / private / community / hybrid | Who the cloud is shared with and where it runs |
Providers and why it matters for markets
The largest public cloud providers are Amazon Web Services, Microsoft Azure and Google Cloud. Companies’ cloud revenue and spending on data centres, chips and electricity are widely followed in earnings reports, and demand for AI computing has increased attention on it. Outages at a major provider can disrupt many services at once.