How does cloud computing work?

Rather than owning their own computing infrastructure or data centers, companies can rent access to anything from applications to storage from a cloud service provider.

One benefit of using cloud computing services is that firms can avoid the upfront cost and complexity of owning and maintaining their own IT infrastructure, and instead simply pay for what they use, when they use it.

In turn, providers of cloud computing services can benefit from significant economies of scale by delivering the same services to a wide range of customers.

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What are examples of cloud computing?

Cloud computing underpins a vast number of services. That includes consumer services like Gmail or the cloud back-up of the photos on your smartphone, though to the services which allow large enterprises to host all their data and run all of their applications in the cloud. Netflix relies on cloud computing services to run its its video streaming service and its other business systems too, and have a number of other organisations.

Cloud computing is becoming the default option for many apps: software vendors are increasingly offering their applications as services over the internet rather than standalone products as they try to switch to a subscription model. However, there is a potential downside to cloud computing, in that it can also introduce new costs and new risks for companies using it.