What is cloud computing? A plain explanation

What is cloud computing? It's renting computing power, storage and software over the internet instead of owning and running the hardware yourself. A provider such as Amazon Web Services, Microsoft Azure or Google Cloud runs the data centers, and you use what you need and pay for what you use.

Last updated October 28, 2026

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The short version

Cloud computing delivers servers, storage, databases, networking and software over the internet, on demand.
The 3 main service types are infrastructure (IaaS), platforms (PaaS) and finished apps (SaaS).
Clouds can be public, private, hybrid or community. Using several providers at once is called multicloud.
Security is shared: the provider secures its infrastructure, and you secure your data, accounts and settings.
You may use it already. Web mail and online photo and file storage are cloud services.

What is cloud computing, in simple terms?

Before the cloud, a company that wanted a website, an email system or a database bought servers, put them in a room, kept them cool and patched them. With cloud computing, that hardware sits in a provider's data center. You reach it over the internet and rent as much of it as you need.

The major providers describe it in similar terms. AWS calls cloud computing "the on-demand delivery of IT resources over the Internet with pay-as-you-go pricing." Microsoft describes it as the delivery of computing services, including servers, storage, databases and networking, over the internet. Google says it removes the need for individuals and businesses to manage physical resources themselves and lets them "only pay for what they use."

The US National Institute of Standards and Technology (NIST) published a formal definition in 2011. Its publication, SP 800-145, calls cloud computing a model for on-demand network access to a shared pool of computing resources "that can be rapidly provisioned and released with minimal management effort or service provider interaction."

How cloud computing works

A cloud provider runs large data centers full of servers, storage and networking gear. Software splits that hardware into resources it can hand out to many customers at once. When you ask for a virtual server or a block of storage, the provider's systems set it up for you, usually within minutes, and release it when you're done.

NIST lists 5 essential characteristics of cloud computing:

On-demand self-service. You can add server time or storage yourself, without waiting for someone at the provider to do it.
Broad network access. The service works over the network from phones, tablets, laptops and workstations.
Resource pooling. The provider's hardware serves many customers at once. You generally don't know the exact location of your resources, though you may be able to pick a country, state or data center.
Rapid elasticity. Capacity scales out and back in with demand, in some cases automatically.
Measured service. Usage is metered, so both you and the provider can see what you consumed. NIST notes this is typically billed per use.

That metering is where pay-as-you-go pricing comes from. AWS says the cloud lets businesses "trade fixed expenses (such as data centers and physical servers) for variable expenses." The provider sets a price for each service, so total cost depends on exactly what you run.

The 3 types of cloud computing services: IaaS, PaaS and SaaS

AWS calls IaaS, PaaS and SaaS the 3 main types of cloud computing. The difference is how much of the stack you manage and how much the provider handles.

Infrastructure as a service (IaaS). You rent the basic building blocks: processing, storage and networks. NIST says you control the operating system, storage and the apps you deploy, while the provider runs the hardware underneath. AWS says IaaS gives you the most flexibility and management control. Amazon EC2 virtual servers are an example: AWS says EC2 customers manage the guest operating system and its updates themselves.
Platform as a service (PaaS). You bring your own app and the provider supplies the environment to run it. NIST says you don't manage the servers, operating systems or storage, only your app and some settings for the hosting environment. Microsoft says developers use PaaS to quickly create web or mobile apps.
Software as a service (SaaS). You use a finished app that the provider runs and maintains, usually in a web browser and often on a subscription. NIST's own example is web-based email. You don't manage the infrastructure or the app itself, apart from some settings of your own.

Microsoft also lists serverless computing, where developers build app features without spending time managing the servers and infrastructure behind them.

Service type	What you manage	What the provider manages	Typical user
IaaS	Operating system, storage, apps, some network settings	Physical servers, networking, data centers	IT teams running their own systems
PaaS	Your app and its hosting settings	Servers, operating systems, storage	Developers building apps
SaaS	Your data and some app settings	Everything else, including the app	Anyone using an online app

Public, private, hybrid and multicloud

The service model says what you rent. The deployment model says who the cloud is for. NIST defines 4:

Public cloud. Open to the general public and hosted on the provider's premises. Google says public clouds are run by third-party cloud service providers.
Private cloud. Used only by one organization. It can be run by that organization or a third party, on or off its premises.
Hybrid cloud. 2 or more of these clouds kept separate but linked, so data and apps can move between them. Google says hybrid setups let companies take advantage of public cloud services while keeping the security and compliance controls of a private cloud.
Community cloud. Shared by several organizations with common needs, such as the same security or compliance rules.

Multicloud is a separate idea. Microsoft describes it as using cloud computing services from more than one cloud provider.

Examples of cloud computing in everyday life

Many everyday services run in the cloud. Microsoft lists streaming video, web mail and office productivity software among the services delivered over the internet this way.

Email and documents. Web-based email and online office apps are SaaS.
Photo and file storage. Google says each Google Account includes up to 15GB of storage, shared across Gmail, Google Drive and Google Photos. Microsoft notes that storing files in the cloud frees you from relying on local computers.

Businesses use the same services at a larger scale. AWS gives examples of healthcare companies using the cloud to develop more personalized treatments and financial firms using it for real-time fraud detection.

Benefits and drawbacks

The providers list similar benefits:

No upfront hardware. Microsoft says cloud computing removes the capital expense of buying hardware and software and running on-site data centers.
Speed. Microsoft says resources can be provisioned in minutes.
Scale. AWS says you can scale resources up or down as your needs change and deploy in new regions in minutes.
Backup and recovery. Microsoft says the cloud makes data backup, disaster recovery and business continuity easier and less expensive.

The trade-offs follow from the same design. Cloud services are reached over the network, so you need a working connection to use them. NIST notes that customers generally have no control over, or knowledge of, the exact location of their resources. And because you pay for what you use, a bill grows as usage grows, so it pays to watch what you run.

Is cloud computing safe?

It can be, but the provider doesn't handle all of the security. AWS calls this the shared responsibility model: AWS is responsible for security "of" the cloud, meaning the infrastructure that runs its services, and customers are responsible for security "in" the cloud.

How much falls on you depends on the service. AWS says customers who run EC2 virtual servers manage the guest operating system, its security patches, their apps and the firewall settings. For services where AWS runs more of the stack, such as Amazon S3 storage, customers mainly look after their data, encryption options and who has access.

Google argues that cloud security is generally stronger than security in a company's own data center, citing the depth of the measures large providers put in place. Under the shared responsibility model, your data and access settings stay your responsibility: AWS says customers manage their own data and set permissions. For a personal account, a sensible step is to turn on two-factor authentication or switch to a passkey.

Cloud computing vs cloud storage and edge computing

Cloud storage is one cloud computing service. Google Drive or an Amazon S3 bucket stores files on a provider's servers. Cloud computing is the wider category that also covers virtual servers, databases, networking and apps.

Edge computing moves some of the work closer to where data is created. Microsoft describes it as processing data at the "edge" of the network rather than sending everything to distant data centers. Microsoft says edge systems handle time-sensitive tasks locally and pass the most relevant data to the cloud, so the two usually work together.

Frequently asked questions

When did cloud computing start?

The sources used for this guide don't give a single start date for cloud computing as a whole, but they document 2 milestones: Amazon Web Services announced its S3 storage service on March 14, 2006, and NIST published its formal definition of cloud computing, SP 800-145, in September 2011.

Is cloud computing free?

Many cloud services have free options with limits. At the time of writing, AWS gives new Free Tier accounts $100 in credits, with up to $100 more available, and says more than 30 services are always free within monthly limits. Azure offers a $200 credit for 30 days and Google Cloud a $300 credit over 90 days for new customers, and both have always-free amounts of some services. AWS says you aren't charged on its Free plan unless you convert to a Paid plan. Azure says its free account has spending protection, and Google Cloud bills only after you upgrade to a paid account. Check the current terms before you sign up.

Is Google Drive a type of cloud computing?

Yes. Google Drive stores your files online, and it draws on the storage Google includes with each Google Account, which is up to 15GB. Storage is one of the core services Microsoft and Google list in their definitions of cloud computing.

What are the 4 types of cloud computing?

It depends on who is counting. NIST's 4 deployment models are public, private, hybrid and community clouds. Microsoft instead groups cloud services into 4 broad categories: IaaS, PaaS, serverless and SaaS.

What is AWS in cloud computing?

AWS, short for Amazon Web Services, is Amazon's cloud computing business. AWS says it offers its services with pay-as-you-go pricing, and that pricing for each service is unique. Microsoft Azure and Google Cloud offer similar services.