What is cloud computing?

Simply put, cloud computing is the delivery of computing services—servers, storage, databases, networking, software, analytics and more—over the Internet (“the cloud”). Companies offering these computing services are called cloud providers and typically charge for cloud computing services based on usage, similar to how you are billed for water or electricity at home.
Still foggy on how cloud computing works and what it is for? This beginner’s guide is designed to demystify basic cloud computing jargon and concepts and quickly bring you up to speed.

Top benefits of cloud computing

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Cloud computing is a big shift from the traditional way businesses think about IT resources. What is it about cloud computing? Why is cloud computing so popular? Here are 6 common reasons organisations are turning to cloud computing services:

1. Cost

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Cloud computing eliminates the capital expense of buying hardware and software and setting up and running on-site datacenters—the racks of servers, the round-the-clock electricity for power and cooling, the IT experts for managing the infrastructure. It adds up fast.

2. Productivity

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On-site datacenters typically require a lot of “racking and stacking”—hardware set up, software patching and other time-consuming IT management chores. Cloud computing removes the need for many of these tasks, so IT teams can spend time on achieving more important business goals.

3. Performance

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The biggest cloud computing services run on a worldwide network of secure datacenters, which are regularly upgraded to the latest generation of fast and efficient computing hardware. This offers several benefits over a single corporate datacenter, including reduced network latency for applications and greater economies of scale.

4. Reliability

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Cloud computing makes data backup, disaster recovery and business continuity easier and less expensive, because data can be mirrored at multiple redundant sites on the cloud provider’s network.

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Types of cloud services: IaaS, PaaS, SaaS

Most cloud computing services fall into three broad categories: infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (Saas). These are sometimes called the cloud computing stack, because they build on top of one another. Knowing what they are and how they are different makes it easier to accomplish your business goals.

Infrastructure-as-a-service (IaaS)

The most basic category of cloud computing services. With IaaS, you rent IT infrastructure—servers and virtual machines (VMs), storage, networks, operating systems—from a cloud provider on a pay-as-you-go basis. To learn more, see What is IaaS?

Platform as a service (PaaS)

Platform-as-a-service (PaaS) refers to cloud computing services that supply an on-demand environment for developing, testing, delivering and managing software applications. PaaS is designed to make it easier for developers to quickly create web or mobile apps, without worrying about setting up or managing the underlying infrastructure of servers, storage, network and databases needed for development. To learn more, see What is PaaS?

Software as a service (SaaS)

Software-as-a-service (SaaS) is a method for delivering software applications over the Internet, on demand and typically on a subscription basis. With SaaS, cloud providers host and manage the software application and underlying infrastructure and handle any maintenance, like software upgrades and security patching. Users connect to the application over the Internet, usually with a web browser on their phone, tablet or PC.

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Types of cloud deployments: public, private, hybrid


Public cloud

Public clouds are owned and operated by a third-party cloud service provider, which deliver their computing resources like servers and storage over the Internet. Microsoft Azure is an example of a public cloud. With a public cloud, all hardware, software and other supporting infrastructure is owned and managed by the cloud provider. You access these services and manage your account using a web browser.


Private cloud

A private cloud refers to cloud computing resources used exclusively by a single business or organisation. A private cloud can be physically located on the company’s on-site datacenter. Some companies also pay third-party service providers to host their private cloud. A private cloud is one in which the services and infrastructure are maintained on a private network.


Hybrid cloud

Hybrid clouds combine public and private clouds, bound together by technology that allows data and applications to be shared between them. By allowing data and applications to move between private and public clouds, hybrid cloud gives businesses greater flexibility and more deployment options.

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How cloud computing works

Cloud computing services all work a little differently, depending on the provider. But many provide a friendly, browser-based dashboard that makes it easier for IT professionals and developers to order resources and manage their accounts. Some cloud computing services are also designed to work with REST APIs and a command-line interface (CLI), giving developers multiple options.

Oracle Cloud Services Delivered in Your Data Center

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Cloud Innovation in Your Datacenter

Get the latest software & updates as Oracle Cloud in your own datacenter. Modernize your infrastructure & platforms without having to compromise on data residency.

Rapid Application Development

Enable rapid application development, DevOps, and the latest cloud architectures in your core business. You focus on your application; let Oracle manage the platform.

Write Once. Deploy Anywhere

Develop, test, and deploy across Oracle public and private clouds without rewriting applications. Full workload portability between your premises and Oracle Cloud.

Flexible Subscription Pricing

Unlimited usage within different capacity tiers for a flat monthly fee. No need to purchase hardware, software, or maintenance services.

Moving your applications to the cloud gives you simplicity of automation

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- Self-driving with fully automated patching, upgrades, backups, and integrated availability architecture.
- Autonomously performs management functions to eliminate potential costly, manual error-prone processing.

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- Self-tuning database consumes fewer computer resources than a human-tuned system.
- Resources are only provisioned as needed by types of workloads, minimizing cloud resources consumption.

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Self-securing administers security automatically with self-patch and self-updates.
- All data is automatically encrypted.
- Access is monitored and controlled to protect from external access as well as

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