Cloud computing relies on sharing of resources to achieve coherence and economies of scale, similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing is the broader concept of converged infrastructure and shared services.
Cloud computing, or in simpler shorthand just “the cloud”, also focuses on maximizing the effectiveness of the shared resources. Cloud resources are usually not only shared by multiple users but are also dynamically reallocated per demand. This can work for allocating resources to users. For example, a cloud computer facility that serves European users during European business hours with a specific application (e.g., email) may reallocate the same resources to serve North American users during North America’s business hours with a different application (e.g., a web server). This approach should maximize the use of computing power thus reducing environmental damage as well since less power, air conditioning, rack space, etc. are required for a variety of functions. With cloud computing, multiple users can access a single server to retrieve and update their data without purchasing licenses for different applications.
The term “moving to cloud” also refers to an organization moving away from a traditional CAPEX model (buy the dedicated hardware and depreciate it over a period of time) to the OPEX model (use a shared cloud infrastructure and pay as one uses it).
Proponents claim that cloud computing allows companies to avoid upfront infrastructure costs, and focus on projects that differentiate their businesses instead of on infrastructure. Proponents also claim that cloud computing allows enterprises to get their applications up and running faster, with improved manageability and less maintenance, and enables IT to more rapidly adjust resources to meet fluctuating and unpredictable business demand. Cloud providers typically use a “pay as you go” model. This can lead to unexpectedly high charges if administrators do not adapt to the cloud pricing model.
The present availability of high-capacity networks, low-cost computers and storage devices as well as the widespread adoption of hardware virtualization, service-oriented architecture, and autonomic and utility computing have led to a growth in cloud computing. Companies can scale up as computing needs increase and then scale down again as demands decrease.
Cloud vendors are experiencing growth rates of 50% per annum.
History of cloud computing
Origin of the term
The origin of the term cloud computing is unclear. The expression cloud is commonly used in science to describe a large agglomeration of objects that visually appear from a distance as a cloud and describes any set of things whose details are not inspected further in a given context. Another explanation is that the old programs to draw network schematics surrounded the icons for servers with a circle, and a cluster of servers in a network diagram had several overlapping circles, which resembled a cloud.
In analogy to above usage the word cloud was used as a metaphor for the Internet and a standardized cloud-like shape was used to denote a network on telephony schematics and later to depict the Internet incomputer network diagrams. With this simplification, the implication is that the specifics of how the end points of a network are connected are not relevant for the purposes of understanding the diagram. The cloud symbol was used to represent the Internet as early as 1994, in which servers were then shown connected to, but external to, the cloud.
References to cloud computing in its modern sense appeared as early as 1996, with the earliest known mention in a Compaq internal document.
The popularization of the term can be traced to 2006 when Amazon.com introduced the Elastic Compute Cloud.
The underlying concept of cloud computing dates to the 1950s, when large-scale mainframe computers were seen as the future of computing, and became available in academia and corporations, accessible via thin clients/terminal computers, often referred to as “dumb terminals“, because they were used for communications but had no internal processing capacities. To make more efficient use of costly mainframes, a practice evolved that allowed multiple users to share both the physical access to the computer from multiple terminals as well as the CPU time. This eliminated periods of inactivity on the mainframe and allowed for a greater return on the investment. The practice of sharing CPU time on a mainframe became known in the industry as time-sharing. During the mid 70s, time-sharing was popularly known as RJE (Remote Job Entry); this nomenclature was mostly associated with large vendors such as IBM and DEC. IBM developed the VM Operating System to provide time-sharing services.
In the 1990s, telecommunications companies, who previously offered primarily dedicated point-to-point data circuits, began offering virtual private network (VPN) services with comparable quality of service, but at a lower cost. By switching traffic as they saw fit to balance server use, they could use overall network bandwidth more effectively. They began to use the cloud symbol to denote the demarcation point between what the provider was responsible for and what users were responsible for. Cloud computing extends this boundary to cover all servers as well as the network infrastructure.
As computers became more prevalent, scientists and technologists explored ways to make large-scale computing power available to more users through time-sharing. They experimented with algorithms to optimize the infrastructure, platform, and applications to prioritize CPUs and increase efficiency for end users.
Since 2000 cloud computing has come into existence. In early 2008, OpenNebula, enhanced in the RESERVOIR European Commission-funded project, became the first open-source software for deploying private and hybrid clouds, and for the federation of clouds. In the same year, efforts were focused on providing quality of service guarantees (as required by real-time interactive applications) to cloud-based infrastructures, in the framework of the IRMOS European Commission-funded project, resulting in a real-time cloud environment. By mid-2008, Gartner saw an opportunity for cloud computing “to shape the relationship among consumers of IT services, those who use IT services and those who sell them” and observed that “organizations are switching from company-owned hardware and software assets to per-use service-based models” so that the “projected shift to computing … will result in dramatic growth in IT products in some areas and significant reductions in other areas.”
Microsoft Azure became available in late 2008.
In July 2010, Rackspace Hosting and NASA jointly launched an open-source cloud-software initiative known as OpenStack. The OpenStack project intended to help organizations offer cloud-computing services running on standard hardware. The early code came from NASA’s Nebula platform as well as from Rackspace’s Cloud Files platform.
On March 1, 2011, IBM announced the IBM SmartCloud framework to support Smarter Planet. Among the various components of the Smarter Computing foundation, cloud computing is a critical piece.
On June 7, 2012, Oracle announced the Oracle Cloud. While aspects of the Oracle Cloud are still in development, this cloud offering is posed to be the first to provide users with access to an integrated set of IT solutions, including the Applications (SaaS), Platform (PaaS), and Infrastructure (IaaS) layers.
Cloud computing is the result of evolution and adoption of existing technologies and paradigms. The goal of cloud computing is to allow users to take beneﬁt from all of these technologies, without the need for deep knowledge about or expertise with each one of them. The cloud aims to cut costs, and helps the users focus on their core business instead of being impeded by IT obstacles.
The main enabling technology for cloud computing is virtualization. Virtualization software separates a physical computing device into one or more “virtual” devices, each of which can be easily used and managed to perform computing tasks. With operating system–level virtualization essentially creating a scalable system of multiple independent computing devices, idle computing resources can be allocated and used more efficiently. Virtualization provides the agility required to speed up IT operations, and reduces cost by increasing infrastructure utilization. Autonomic computing automates the process through which the user can provision resources on-demand. By minimizing user involvement, automation speeds up the process, reduces labor costs and reduces the possibility of human errors.
Users routinely face difficult business problems. Cloud computing adopts concepts from Service-oriented Architecture (SOA) that can help the user break these problems into services that can be integrated to provide a solution. Cloud computing provides all of its resources as services, and makes use of the well-established standards and best practices gained in the domain of SOA to allow global and easy access to cloud services in a standardized way.
Cloud computing also leverages concepts from utility computing to provide metrics for the services used. Such metrics are at the core of the public cloud pay-per-use models. In addition, measured services are an essential part of the feedback loop in autonomic computing, allowing services to scale on-demand and to perform automatic failure recovery.
Cloud computing is a kind of grid computing; it has evolved by addressing the QoS (quality of service) and reliability problems. Cloud computing provides the tools and technologies to build data/compute intensive parallel applications with much more affordable prices compared to traditional parallel computing techniques.
Cloud computing shares characteristics with:
- Client–server model — Client–server computing refers broadly to any distributed application that distinguishes between service providers (servers) and service requestors (clients).
- Grid computing — “A form of distributed and parallel computing, whereby a ‘super and virtual computer’ is composed of a cluster of networked, loosely coupled computers acting in concert to perform very large tasks.”
- Mainframe computer — Powerful computers used mainly by large organizations for critical applications, typically bulk data processing such as: census; industry and consumer statistics; police and secret intelligence services; enterprise resource planning; and financial transaction processing.
- Utility computing — The “packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility, such as electricity.”
- Peer-to-peer — A distributed architecture without the need for central coordination. Participants are both suppliers and consumers of resources (in contrast to the traditional client–server model).
Cloud computing exhibits the following key characteristics:
- Agility improves with users’ ability to re-provision technological infrastructure resources.
- Cost reductions claimed by cloud providers. A public-cloud delivery model converts capital expenditure to operational expenditure. This purportedly 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). The e-FISCAL project’s state-of-the-art repository contains several articles looking into cost aspects in more detail, most of them concluding that costs savings depend on the type of activities supported and the type of infrastructure available in-house.
- Device and location independence enable users to access systems using a web browser regardless of their location or what device they use (e.g., PC, mobile phone). As infrastructure is off-site (typically provided by a third-party) and accessed via the Internet, users can connect from anywhere.
- Maintenance of cloud computing applications is easier, because they do not need to be installed on each user’s computer and can be accessed from different places.
- Multitenancy enables sharing of resources and costs across a large pool of users thus allowing for:
- Performance is monitored, and consistent and loosely coupled architectures are constructed using web services as the system interface.
- Productivity may be increased when multiple users can work on the same data simultaneously, rather than waiting for it to be saved and emailed. Time may be saved as information does not need to be re-entered when fields are matched, nor do users need to install application software upgrades to their computer.
- Reliability improves with the use of multiple redundant sites, which makes well-designed cloud computing suitable for business continuity and disaster recovery.
- Scalability and elasticity via dynamic (“on-demand”) provisioning of resources on a fine-grained, self-service basis in near real-time (Note, the VM startup time varies by VM type, location, OS and cloud providers), without users having to engineer for peak loads.
- Security can improve 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 other traditional systems, in part because providers are able to devote resources to solving security issues that many customers cannot afford to tackle. However, the complexity of security is greatly increased when data is distributed over a wider area or over a greater number of devices, as well as in multi-tenant systems shared by unrelated users. In addition, user access to security audit logs may be difficult or impossible. Private cloud installations are in part motivated by users’ desire to retain control over the infrastructure and avoid losing control of information security.
The National Institute of Standards and Technology‘s definition of cloud computing identifies “five essential characteristics”:
On-demand self-service. A consumer can unilaterally provision computing capabilities, such as server time and network storage, as needed automatically without requiring human interaction with each service provider.
Broad network access. Capabilities are available over the network and accessed through standard mechanisms that promote use by heterogeneous thin or thick client platforms (e.g., mobile phones, tablets, laptops, and workstations).
Resource pooling. The provider’s computing resources are pooled to serve multiple consumers using a multi-tenant model, with different physical and virtual resources dynamically assigned and reassigned according to consumer demand.
Rapid elasticity. Capabilities can be elastically provisioned and released, in some cases automatically, to scale rapidly outward and inward commensurate with demand. To the consumer, the capabilities available for provisioning often appear unlimited and can be appropriated in any quantity at any time.
Measured service. Cloud systems automatically control and optimize resource use by leveraging a metering capability at some level of abstraction appropriate to the type of service (e.g., storage, processing, bandwidth, and active user accounts). Resource usage can be monitored, controlled, and reported, providing transparency for both the provider and consumer of the utilized service.—National Institute of Standards and Technology
Cloud computing providers offer their services according to several fundamental models:
Infrastructure as a service (IaaS)
In the most basic cloud-service model & according to the IETF (Internet Engineering Task Force), providers of IaaS offer computers – physical or (more often) virtual machines – and other resources. (A hypervisor, such as Xen, Oracle VirtualBox, KVM, VMware ESX/ESXi, or Hyper-V runs the virtual machines as guests. Pools of hypervisors within the cloud operational support-system can support large numbers of virtual machines and the ability to scale services up and down according to customers’ varying requirements.) IaaS clouds often offer additional resources such as a virtual-machine disk image library, raw block storage, and file or object storage, firewalls, load balancers, IP addresses, virtual local area networks (VLANs), and software bundles. IaaS-cloud providers supply these resources on-demand from their large pools installed in data centers. For wide-area connectivity, customers can use either the Internet or carrier clouds (dedicated virtual private networks).
To deploy their applications, cloud users install operating-system images and their application software on the cloud infrastructure. In this model, the cloud user patches and maintains the operating systems and the application software. Cloud providers typically bill IaaS services on a utility computing basis: cost reflects the amount of resources allocated and consumed. 
Platform as a service (PaaS)
In the PaaS models, cloud providers deliver a computing platform, typically including operating system, programming language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software layers. With some PaaS offers like Microsoft Azure and Google App Engine, the underlying computer and storage resources scale automatically to match application demand so that the cloud user does not have to allocate resources manually. The latter has also been proposed by an architecture aiming to facilitate real-time in cloud environments. Even more specific application types can be provided via PaaS, e.g., such as media encoding as provided by services as bitcodin transcoding cloud or media.io.
Software as a service (SaaS)
In the business model using software as a service (SaaS), users are provided access to application software and databases. Cloud providers manage the infrastructure and platforms that run the applications. SaaS is sometimes referred to as “on-demand software” and is usually priced on a pay-per-use basis or using a subscription fee.
In the SaaS model, cloud providers install and operate application software in the cloud and cloud users access the software from cloud clients. Cloud users do not manage the cloud infrastructure and platform where the application runs. This eliminates the need to install and run the application on the cloud user’s own computers, which simplifies maintenance and support. Cloud applications are different from other applications in their scalability—which can be achieved by cloning tasks onto multiple virtual machines at run-time to meet changing work demand. Load balancers distribute the work over the set of virtual machines. This process is transparent to the cloud user, who sees only a single access point. To accommodate a large number of cloud users, cloud applications can be multitenant, that is, any machine serves more than one cloud user organization.
The pricing model for SaaS applications is typically a monthly or yearly flat fee per user, so price is scalable and adjustable if users are added or removed at any point.
Proponents claim SaaS allows a business the potential to reduce IT operational costs by outsourcing hardware and software maintenance and support to the cloud provider. This enables the business to reallocate IT operations costs away from hardware/software spending and personnel expenses, towards meeting other goals. In addition, with applications hosted centrally, updates can be released without the need for users to install new software. One drawback of SaaS is that the users’ data are stored on the cloud provider’s server. As a result, there could be unauthorized access to the data. For this reason, users are increasingly adopting intelligent third-party key management systems to help secure their data.
Users access cloud computing using networked client devices, such as desktop computers, laptops, tablets and smartphones. Some of these devices – cloud clients – rely on cloud computing for all or a majority of their applications so as to be essentially useless without it. Examples are thin clients and the browser-based Chromebook. Many cloud applications do not require specific software on the client and instead use a web browser to interact with the cloud application. With Ajax and HTML5 these Web user interfaces can achieve a similar, or even better, look and feel to native applications. Some cloud applications, however, support specific client software dedicated to these applications (e.g., virtual desktop clients and most email clients). Some legacy applications (line of business applications that until now have been prevalent in thin client computing) are delivered via a screen-sharing technology.
Private cloud is cloud infrastructure operated solely for a single organization, whether managed internally or by a third-party, and hosted either internally or externally. Undertaking a private cloud project requires a significant level and degree of engagement to virtualize the business environment, and requires the organization to reevaluate decisions about existing resources. When done right, it can improve business, but every step in the project raises security issues that must be addressed to prevent serious vulnerabilities. Self-run data centers are generally capital intensive. They have a significant physical footprint, requiring allocations of space, hardware, and environmental controls. These assets have to be refreshed periodically, resulting in additional capital expenditures. They have attracted criticism because users “still have to buy, build, and manage them” and thus do not benefit from less hands-on management, essentially “[lacking] the economic model that makes cloud computing such an intriguing concept”.
A cloud is called a “public cloud” when the services are rendered over a network that is open for public use. Public cloud services may be free.Technically there may be little or no difference between public and private cloud architecture, however, security consideration may be substantially different for services (applications, storage, and other resources) that are made available by a service provider for a public audience and when communication is effected over a non-trusted network. Saasu is a large public cloud. Generally, public cloud service providers like Amazon AWS, Microsoft and Google own and operate the infrastructure at their data center and access is generally via the Internet. AWS and Microsoft also offer direct connect services called “AWS Direct Connect” and “Azure ExpressRoute” respectively, such connections require customers to purchase or lease a private connection to a peering point offered by the cloud provider.
Hybrid cloud is a composition of two or more clouds (private, community or public) that remain distinct entities but are bound together, offering the benefits of multiple deployment models. Hybrid cloud can also mean the ability to connect collocation, managed and/or dedicated services with cloud resources.
Gartner, Inc. defines a hybrid cloud service as a cloud computing service that is composed of some combination of private, public and community cloud services, from different service providers. A hybrid cloud service crosses isolation and provider boundaries so that it can’t be simply put in one category of private, public, or community cloud service. It allows one to extend either the capacity or the capability of a cloud service, by aggregation, integration or customization with another cloud service.
Varied use cases for hybrid cloud composition exist. For example, an organization may store sensitive client data in house on a private cloud application, but interconnect that application to a business intelligence application provided on a public cloud as a software service. This example of hybrid cloud extends the capabilities of the enterprise to deliver a specific business service through the addition of externally available public cloud services. Hybrid cloud adoption depends on a number of factors such as data security and compliance requirements, level of control needed over data, and the applications an organization uses.
Another example of hybrid cloud is one where IT organizations use public cloud computing resources to meet temporary capacity needs that can not be met by the private cloud. This capability enables hybrid clouds to employ cloud bursting for scaling across clouds. Cloud bursting is an application deployment model in which an application runs in a private cloud or data center and “bursts” to a public cloud when the demand for computing capacity increases. A primary advantage of cloud bursting and a hybrid cloud model is that an organization only pays for extra compute resources when they are needed. Cloud bursting enables data centers to create an in-house IT infrastructure that supports average workloads, and use cloud resources from public or private clouds, during spikes in processing demands.
The specialized model of hybrid cloud, which is built atop heterogeneous hardware, is called “Cross-platform Hybrid Cloud”. A cross-platform hybrid cloud is usually powered by different CPU architectures, for example, x86-64 and ARM, underneath. Users can transparently deploy applications without knowledge of the cloud’s hardware diversity. This kind of cloud emerges from the raise of ARM-based system-on-chip for server-class computing.
Community cloud shares infrastructure between several organizations from a specific community with common concerns (security, compliance, jurisdiction, etc.), whether managed internally or by a third-party, and either hosted internally or externally. The costs are spread over fewer users than a public cloud (but more than a private cloud), so only some of the cost savings potential of cloud computing are realized.
A cloud computing platform can be assembled from a distributed set of machines in different locations, connected to a single network or hub service. It is possible to distinguish between two types of distributed clouds: public-resource computing and volunteer cloud.
- Public-resource computing: This type of distributed cloud results from an expansive definition of cloud computing, because they are more akin to distributed computing than cloud computing. Nonetheless, it is considered a sub-class of cloud computing, and some examples include distributed computing platforms such as BOINC and Folding@Home.
- Volunteer cloud: Volunteer cloud computing is characterized as the intersection of public-resource computing and cloud computing, where a cloud computing infrastructure is built using volunteered resources. Many challenges arise from this type of infrastructure, because of the volatility of the resources used to built it and the dynamic environment it operates in. It can also be called peer-to-peer clouds, or ad-hoc clouds. An interesting effort in such direction is Cloud@Home, it aims to implement a cloud computing infrastructure using volunteered resources providing a business-model to incentivize contributions through financial restitution 
The Intercloud is an interconnected global “cloud of clouds” and an extension of the Internet “network of networks” on which it is based. The focus is on direct interoperability between public cloud service providers, more so than between providers and consumers (as is the case for hybrid- and multi-cloud).
Multicloud is the use of multiple cloud computing services in a single heterogeneous architecture to reduce reliance on single vendors, increase flexibility through choice, mitigate against disasters, etc. It differs from hybrid cloud in that it refers to multiple cloud services, rather than multiple deployment modes (public, private, legacy).
Cloud architecture, the systems architecture of the software systems involved in the delivery of cloud computing, typically involves multiple cloud components communicating with each other over a loose coupling mechanism such as a messaging queue. Elastic provision implies intelligence in the use of tight or loose coupling as applied to mechanisms such as these and others.
Cloud engineering is the application of engineering disciplines to cloud computing. It brings a systematic approach to the high-level concerns of commercialization, standardization, and governance in conceiving, developing, operating and maintaining cloud computing systems. It is a multidisciplinary method encompassing contributions from diverse areas such as systems, software, web, performance, information, security, platform, risk, and qualityengineering.
Security and privacy
Cloud computing poses privacy concerns because the service provider can access the data that is on the cloud at any time. It could accidentally or deliberately alter or even delete information. Many cloud providers can share information with third parties if necessary for purposes of law and order even without a warrant. That is permitted in their privacy policies which users have to agree to before they start using cloud services. Solutions to privacy include policy and legislation as well as end users’ choices for how data is stored. Users can encrypt data that is processed or stored within the cloud to prevent unauthorized access.
According to the Cloud Security Alliance, the top three threats in the cloud are “Insecure Interfaces and API’s”, “Data Loss & Leakage”, and “Hardware Failure” which accounted for 29%, 25% and 10% of all cloud security outages respectively — together these form shared technology vulnerabilities. In a cloud provider platform being shared by different users there may be a possibility that information belonging to different customers resides on same data server. Therefore Information leakage may arise by mistake when information for one customer is given to other. Additionally, Eugene Schultz, chief technology officer at Emagined Security, said that hackers are spending substantial time and effort looking for ways to penetrate the cloud. “There are some real Achilles’ heels in the cloud infrastructure that are making big holes for the bad guys to get into”. Because data from hundreds or thousands of companies can be stored on large cloud servers, hackers can theoretically gain control of huge stores of information through a single attack — a process he called “hyperjacking”.
There is the problem of legal ownership of the data (If a user stores some data in the cloud, can the cloud provider profit from it?). Many Terms of Service agreements are silent on the question of ownership.
Physical control of the computer equipment (private cloud) is more secure than having the equipment off site and under someone else’s control (public cloud). This delivers great incentive to public cloud computing service providers to prioritize building and maintaining strong management of secure services. Some small businesses that don’t have expertise in IT security could find that it’s more secure for them to use a public cloud.
There is the risk that end users don’t understand the issues involved when signing on to a cloud service (persons sometimes don’t read the many pages of the terms of service agreement, and just click “Accept” without reading). This is important now that cloud computing is becoming popular and required for some services to work, for example for an intelligent personal assistant (Apple’s Siri or Google Now).
Fundamentally private cloud is seen as more secure with higher levels of control for the owner, however public cloud is seen to be more flexible and requires less time and money investment from the user.
According to Gartner’s Hype cycle, cloud computing has reached a maturity that leads it into a productive phase. This means that most of the main issues with cloud computing have been addressed to a degree that clouds have become interesting for full commercial exploitation. This however does not mean that all the problems listed above have actually been solved, only that the according risks can be tolerated to a certain degree. Cloud computing is therefore still as much a research topic, as it is a market offering. What is clear through the evolution of Cloud Computing services is that the CTO is a major driving force behind Cloud adoption. The major Cloud technology developers continue to invest billions a year in Cloud R&D; for example, in 2011 Microsoft committed 90% of its $9.6bn R&D budget to Cloud.