In simple terms, cloud computing means using the internet to access computing resources (like servers, storage, or software) that are located on remote data centers rather than on your own computer.
This lets people and businesses use powerful computers and vast storage on-demand without having to own that equipment.
Over the past two decades, cloud computing has grown into a huge part of our daily lives and the global economy (with worldwide cloud services spending reaching hundreds of billions of dollars annually as of 2024).
In this article, we’ll break down what cloud computing is, a bit of its history, real-world examples, the main providers, and how it’s continuing to evolve – all in easy-to-understand language.
What it is
Cloud computing is basically computing as a service. Instead of running programs or storing data on your own local computer, you use a network of remote servers hosted on the Internet – i.e. “in the cloud” – to do it.
You can rent computing power or storage from a cloud provider and access it through the internet, only paying for what you use.
This setup eliminates the need for you (or a company) to buy and maintain a bunch of physical servers or data centers yourself. For example, if you use Google Docs to write a paper, the software isn’t running on your laptop – it’s running on Google’s cloud servers, and you’re just interacting with it through your web browser.
Cloud computing services are typically divided into a few categories.
Infrastructure as a Service (IaaS)
This means renting raw computing resources – for instance, you can rent virtual servers or storage space (like Amazon’s S3 storage service).
Platform as a Service (PaaS)
This provides a ready-to-use platform (like an environment for developers to build and deploy applications without worrying about the underlying servers).
Software as a Service (SaaS)
This means using complete applications over the internet (for example, an email service or a Customer Relationship Management (CRM) software that you access via browser). In all these cases, the actual computing work is done in remote machines owned by a provider, and you just connect to it.
Why is It Called Cloud Computing?
Cloud computing gets its name from the cloud symbol that is often used to represent the internet in network diagrams. The idea is that all the complicated bits (servers, cables, data storage, etc.) are hidden inside the “cloud” icon – you don’t need to worry about them.
You simply send a request into the cloud, and the service you need comes back out. The cloud provider takes care of the technical heavy lifting behind the scenes, like updating hardware, managing security, and scaling resources to meet demand.
Cloud Computing is Everywhere
Most of us are using cloud computing. In other words, we are accessing data in the cloud virtually every day. Furthermore, much of the time we don’t even realize it.
Do you watch movies and TV series on Netflix? If you do, it is thanks to cloud computing. Netflix provides services to its subscribers because it is a customer of cloud computing services.
Scalability
One key aspect of cloud computing is scalability. Because resources are provided over the internet, you can usually scale up or down quickly.
For example, if an application suddenly needs more computing power because millions of people are using it at once, the cloud can dynamically allocate more server resources to handle the load – and later scale back down when demand decreases.
Cloud services are also typically offered on-demand: you can get a new server or more storage space in minutes with just a few clicks, instead of having to purchase and set up new hardware.
And since it’s pay-as-you-go, users only pay for what they use – this is often more cost-effective, especially for startups or individuals who can’t afford large upfront investments in IT infrastructure.
People who use online banking are accessing data and performing transactions in the cloud. In fact, ‘the cloud‘ is simply a metaphor for the Internet.
A Brief History of Cloud Computing
The idea behind cloud computing has roots going back decades.
As far back as the 1960s, computer scientists were talking about the concept of time-sharing, where multiple users could share access to a single large computer simultaneously.
This was an early way of offering computing power as a utility – John McCarthy, one of the pioneers of AI, even suggested in the 1960s that computing might one day be organized as a public utility (similar to electricity or water). In those days, of course, it wasn’t called “cloud computing,” but the basic notion was similar: make powerful computing resources available to many people who don’t have them locally.
The term “cloud computing” itself started popping up in the 1990s. A big moment came in 1996 when a group at Compaq (a computer company at the time) used “cloud computing” in a business plan to describe the future of internet-based computing.
The idea was that software and files could be provided over the internet rather than installed on individual PCs – a pretty forward-thinking concept back then.
Through the late 1990s and early 2000s, we saw the rise of early cloud-like services. For example, Salesforce, founded in 1999, offered a customer relationship management (CRM) product entirely online (this was an early SaaS – Software as a Service – offering).
And in the early 2000s, web-based email (like Hotmail or Gmail) showed people that applications could live on the web.
Cloud computing as we know it truly took off in the mid-2000s.
In 2006, Amazon launched Amazon Web Services (AWS) and introduced the first widely used cloud storage and compute services for developers (Amazon S3 for storage and EC2 for compute).
This allowed any developer or company to rent Amazon’s computing infrastructure to run their own applications – a game-changer for the industry. A few years later, in 2010, Microsoft launched Azure, its own cloud computing platform.
Google also formalized its cloud offerings (Google Cloud) around this time, after years of using internal cloud-like infrastructure for its search and other services.
Since then, many others (IBM, Oracle, Alibaba, and more) have entered the cloud market as well. Over the 2010s, cloud computing went from a novel idea to a default approach for building and delivering software.
Today, in the mid-2020s, cloud computing is everywhere. Most websites and apps you use are backed by cloud servers.
Businesses large and small have moved their data and applications to the cloud for flexibility and cost savings.
Cloud Computing Services
Not all clouds are the same – there are several major companies that provide cloud computing services to the world.
Larry Ellison, co-founder of Oracle Corporation, once said: “The interesting thing about cloud computing is that we’ve redefined cloud computing to include everything that we already do. I can’t think of anything that isn’t cloud computing with all of these announcements. The computer industry is the only industry that is more fashion-driven than women’s fashion.” (Image: Wikipedia)
These cloud providers offer the infrastructure and platforms that others rent and use.
Here’s an overview of the big players (as of 2025):
Amazon Web Services (AWS)
AWS is the cloud platform by Amazon and is the largest cloud provider by market share. Launched in the mid-2000s (AWS began offering storage and compute services in 2006), it was a pioneer in modern cloud computing.
AWS offers hundreds of different services – from basic storage and servers to advanced databases, machine learning tools, and more – all available on a pay-as-you-go model. As of late 2024, AWS alone accounts for roughly one-third of the global cloud infrastructure market.
Companies like Netflix, Airbnb, and many others use AWS as the backbone of their online operations. Amazon has built a vast global network of data centers for AWS, allowing users to deploy their applications in regions all over the world.
Microsoft Azure
Azure is Microsoft’s cloud computing platform, launched in 2010 as an effort to bring Microsoft’s software expertise to the cloud. It’s the second-largest cloud provider globally. Many organizations that already use Microsoft products (like Windows Server, SQL Server, or Office) find Azure to be an attractive option because of easy integration.
Azure offers similar services to AWS (virtual machines, databases, AI services, etc.) and is continually expanding. Microsoft has data centers on every continent to serve Azure customers.
In terms of market share, Azure holds around 20% of the global cloud market as of 2024, and it has been growing steadily. Big companies, and even government agencies, often use Azure for its strong enterprise security and support.
Google Cloud Platform (GCP)
Google Cloud is the cloud service suite offered by Google. It is known for its strengths in data analytics and machine learning (after all, Google itself is an expert at handling big data). GCP provides services similar to AWS and Azure – such as Google Compute Engine (for virtual servers), Google Cloud Storage, BigQuery (a data analysis tool), and TensorFlow/AI Platform for machine learning.
Google has leveraged its experience running products like Google Search and YouTube to build a robust cloud infrastructure. GCP is the third-largest provider, with roughly 10–12% of the market. Many developers also use Google’s cloud for hosting websites and apps, and products like Firebase (for mobile app backends) are part of Google’s cloud offerings.
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