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Cloud computing is Internet- ("cloud-") based development and use of computer technology ("computing"). In concept, it is a paradigm shift whereby details are abstracted from the users who no longer need knowledge of, expertise in, or control over the technology infrastructure "in the cloud" that supports them. It typically involves the provision of dynamically scalable and often virtualized resources as a service over the Internet.

The term cloud is used as a metaphor for the Internet, based on how the Internet is depicted in computer network diagrams and is an abstraction of the underlying infrastructure it conceals. Typical cloud computing providers deliver common business applications online which are accessed from a web browser, while the software and data are stored on the servers.

These applications are broadly divided into the following categories: Software as a Service (SaaS), Utility Computing, Web Services, Platform as a Service (PaaS), Managed Service Providers (MSP), Service Commerce, and Internet Integration. The name cloud computing was inspired by the cloud symbol that is often used to represent the Internet in flow charts and diagrams.

Economics

Cloud computing users can avoid capital expenditure (CapEx) on hardware, software, and services when they pay a provider only for what they use. Consumption is usually billed on a utility (resources consumed, like electricity) or subscription (time-based, like a newspaper) basis with little or no upfront cost. Other benefits of this time sharing-style approach are low barriers to entry, shared infrastructure and costs, low management overhead, and immediate access to a broad range of applications. In general, users can terminate the contract at any time (thereby avoiding return on investment risk and uncertainty), and the services are often covered by service level agreements (SLAs) with financial penalties.

According to Nicholas Carr, the strategic importance of information technology is diminishing as it becomes standardized and less expensive. He argues that the cloud computing paradigm shift is similar to the displacement of electricity generators by electricity grids early in the 20th century.

Although companies might be able to save on upfront capital expenditures, they might not save much and might actually pay more for operating expenses. In situations where the capital expense would be relatively small, or where the organization has more flexibility in their capital budget than their operating budget, the cloud model might not make great fiscal sense. Other factors impacting the scale of any potential cost savings include the efficiency of a company’s data center as compared to the cloud vendor’s, the company's existing operating costs, the level of adoption of cloud computing, and the type of functionality being hosted in the cloud.

Key characteristics

• Agility improves with users able to rapidly and inexpensively re-provision technological infrastructure resources.

• Cost is claimed to be greatly reduced and capital expenditure is converted to operational expenditure. This ostensibly lowers barriers to entry, as infrastructure is typically provided by a third-party and does not need to be purchased for one-time or infrequent intensive computing tasks. Pricing on a utility computing basis is fine-grained with usage-based options and fewer IT skills are required for implementation (in-house).

• Device and location independence[35] enable users to access systems using a web browser regardless of their location or what device they are using (e.g., PC, mobile). As infrastructure is off-site (typically provided by a third-party) and accessed via the Internet, users can connect from anywhere.

• Multi-tenancy enables sharing of resources and costs across a large pool of users thus allowing for:
  o Centralization of infrastructure in locations with lower costs (such as real estate, electricity, etc.)
  o Peak-load capacity increases (users need not engineer for highest possible load-levels)
  o Utilization and efficiency improvements for systems that are often only 10–20% utilized.

• Reliability improves through the use of multiple redundant sites, which makes cloud computing suitable for business continuity and disaster recovery. Nonetheless, many major cloud computing services have suffered outages, and IT and business managers can at times do little when they are affected.

• Scalability via dynamic ("on-demand") provisioning of resources on a fine-grained, self-service basis near real-time, without users having to engineer for peak loads. Performance is monitored, and consistent and loosely-coupled architectures are constructed using web services as the system interface.

• Security typically improves due to centralization of data, increased security-focused resources, etc., but concerns can persist about loss of control over certain sensitive data, and the lack of security for stored kernels. Security is often as good as or better than under traditional systems, in part because providers are able to devote resources to solving security issues that many customers cannot afford. Providers typically log accesses, but accessing the audit logs themselves can be difficult or impossible. Furthermore, the complexity of security is greatly increased when data is distributed over a wider area and / or number of devices.

• Sustainability comes about through improved resource utilization, more efficient systems, and carbon neutrality. Nonetheless, computers and associated infrastructure are major consumers of energy.

• Maintenance cloud computing applications are easier to maintain, since they don't have to be installed on each user's computer. They are easier to support and to improve since the changes reach the clients instantly.

Clients

A cloud client consists of computer hardware and/or computer software that relies on cloud computing for application delivery, or that is specifically designed for delivery of cloud services and that, in either case, is essentially useless without it. For example:

• Mobile (Linux based - Palm Pre-WebOS Linux Kernel, Android-Linux Kernel, iPhone-Darwin Linux Kernel, Microsoft based - Windows Mobile)

• Thin client (CherryPal, Wyse, Zonbu, gOS-based systems)

• Thick client / Web browser (Internet Explorer, Mozilla Firefox, Google Chrome, WebKit)

Application

A cloud application leverages cloud computing in software architecture, often eliminating the need to install and run the application on the customer's own computer, thus alleviating the burden of software maintenance, ongoing operation, and support. For example:

• Peer-to-peer / volunteer computing (BOINC, Skype)

• Web applications (Webmail, Facebook, Twitter, YouTube)

• Security as a service (MessageLabs, Purewire, ScanSafe, Zscaler)

• Software as a service (A2Zapps.com, Google Apps, Salesforce,Learn.com, BigGyan.com)

• Software plus services (Microsoft Online Services)

• Storage [Distributed]
  o Content distribution (BitTorrent, Amazon CloudFront)
  o Synchronisation (Dropbox, Live Mesh, SpiderOak, ZumoDrive)

Platform

A cloud platform (PaaS) delivers a computing platform and/or solution stack as a service, generally consuming cloud infrastructure and supporting cloud applications. It facilitates deployment of applications without the cost and complexity of buying and managing the underlying hardware and software layers. For example:

• Services
   Identity (OAuth, OpenID)
  o Payments (Amazon Flexible Payments Service, Google Checkout, PayPal)
  o Search (Alexa, Google Custom Search, Yahoo! BOSS)
  o Real-world (Amazon Mechanical Turk)

• Solution stacks
  o Java (Google App Engine)
  o PHP (Rackspace Cloud Sites)
  o Python Django (Google App Engine)
  o Ruby on Rails (Heroku)
  o .NET (Azure Services Platform, Rackspace Cloud Sites)
  o Proprietary (Force.com, WorkXpress, Wolf Frameworks)

• Storage [Structured]
  o Databases (Amazon SimpleDB, BigTable)
  o File storage (Amazon S3, Nirvanix, Rackspace Cloud Files)
  o Queues (Amazon SQS)

Types by visibility

Cloud computing types

• Public cloud

Public cloud or external cloud describes cloud computing in the traditional mainstream sense, whereby resources are dynamically provisioned on a fine-grained, self-service basis over the Internet, via web applications/web services, from an off-site third-party provider who shares resources and bills on a fine-grained utility computing basis.

• Hybrid cloud

A hybrid cloud environment consisting of multiple internal and/or external providers "will be typical for most enterprises".[58] A hybrid cloud can describe configuration combining a local device, such as a Plug computer with cloud services. It can also describe configurations combining virtual and physical, colocated assets—for example, a mostly virtualized environment that requires physical servers, routers, or other hardware such as a network appliance acting as a firewall or spam filter.

• Private cloud

Private cloud and internal cloud are neologisms that some vendors have recently used to describe offerings that emulate cloud computing on private networks. These (typically virtualisation automation) products claim to "deliver some benefits of cloud computing without the pitfalls", capitalising on data security, corporate governance, and reliability concerns. They have been criticized on the basis that users "still have to buy, build, and manage them" and as such do not benefit from lower up-front capital costs and less hands-on management, essentially "[lacking] the economic model that makes cloud computing such an intriguing concept".

While an analyst predicted in 2008 that private cloud networks would be the future of corporate IT, there is some uncertainty whether they are a reality even within the same firm. Analysts also claim that within five years a "huge percentage" of small and medium enterprises will get most of their computing resources from external cloud computing providers as they "will not have economies of scale to make it worth staying in the IT business" or be able to afford private clouds.[64]. Analysts have reported on Platform's view that private clouds are a stepping stone to external clouds, particularly for the financial services, and that future datacenters will look like internal clouds.

The term has also been used in the logical rather than physical sense, for example in reference to platform as a service offerings[66], though such offerings including Microsoft's Azure Services Platform are not available for on-premises deployment.

Types of services

Services provided by cloud computing can be split into three major categories[68]:

• Infrastructure-as-a-Service (IaaS)

Infrastructure-as-a-Service (IaaS) like Amazon Web Services provides virtual servers with unique IP addresses and blocks of storage on demand. Customers benefit from an API from which they can control their servers. Because customers can pay for exactly the amount of service they use, like for electricity or water, this service is also called utility computing.

• Platform-as-a-Service (PaaS)

Platform-as-a-Service (PaaS) is a set of software and development tools hosted on the provider's servers. Developers can create applications using the provider's APIs. Google Apps is one of the most famous Platform-as-a-Service providers. Developers should take notice that there aren't any interoperability standards (yet), so some providers may not allow you to take your application and put it on another platform.

• Software-as-a-Service (SaaS)

Software-as-a-Service (SaaS) is the broadest market. In this case the provider allows the customer only to use its applications. The software interacts with the user through a user interface. These applications can be anything from web based email, to applications like Twitter or Last FM.