Back to Cloud Computing Fundamentals Articles

Cloud Computing: It's Not Just a Buzzword. A Reasoned Explanation

You read about it in almost every tech-related publication. Its advocates tout it as a no-brainer with its low costs, its flexibility, and its ease of use. Its detractors say it is not secure and jump on its flaws no matter how minor. It is impossible to escape it these days. It is Cloud Computing and it is here to stay.

What is Cloud Computing?

Let's start by defining what we mean by Cloud Computing. Cloud Computing involves pooling technology resources together to offer centralized services and data storage. This ranges from simple file storage services to complex virtual infrastructures accessible from almost any location or device. It encompasses a variety of growing services.
Software as a Service (SaaS) are hosted applications such as, one of the largest players in the SaaS market.
Platform as a Service (PaaS) offers building blocks for users to put together to build applications and services. Microsoft Azure, Heroku, Beanstalk, and Google App Engine (GAE) are leading examples of PaaS offerings.
Finally, Infrastructure as a Service (IaaS), which includes Amazon Web Services (AWS), is essentially an outsourced hardware model where users pay based on usage.

Software-as-a-Service Leads Cloud Growth

The largest of these three services is SaaS, which is expected to grow from $63B in revenue to an estimated $132B by 2020. All types of companies are helping drive this incredible growth. Consumers of SaaS applications point to reduced costs in licensing, hardware, and administrative costs along with the flexibility, availability, and security offered as standard, out-of-the-box features.
According to, 90% of Fortune 1000 companies with on-premises HR systems plan to it with a Cloud-based system by the mid-2016. Many other types of on-premises systems are being replaced too.
Microsoft has seen a 100% increase in subscriptions to Office 365 in one year along with a 21% increase in revenue. It is estimated that by 2017, 66% of all business workloads will be conducted in the Cloud.

While the move to the Cloud rests on the backs of the technology department, Cloud Computing is not going unnoticed by other departments. CEOs and CFOs are being inundated with advertising that touts the savings of moving to the Cloud.
In a survey conducted by CFO Research and sponsored by Google, a top Cloud services provider, most companies stated they saw cost savings from reducing hardware expenses and in reduced software licensing fees. Money, that 68% of CFOs stated, would be placed back in IT budgets to redirect efforts toward high value activities.

Become a Cloud Expert. Get certified.

Cloud Applications - A Growing Trend

An IBM analysis predicts that 85% of new applications being developed with Cloud in mind. We can see this with some recent startups that have disrupted a market.
Netflix has one of the largest infrastructures in the Cloud. They give back to the community by releasing open source software to help other companies improve their Cloud systems.
Airbnb and Etsy are two more companies born out of the Cloud. Engineers supporting the companies that build Cloud applications require an extensive knowledge of IaaS and PaaS, both of which make developing and running SaaS applications faster, easier, and more secure.

Cloud Infrastructure Investment Expected to Nearly Double

Amazon sees this growth with its Amazon Web Services (AWS) offering. AWS holds nearly half of the $8B a year IaaS market, a market that is expected to grow to $15B annually by 2020. Amazon is investing in new data centers around the world along with the latest and greatest hardware.
James Hamilton, VP & Distinguished Engineer at AWS, stated at re:Invent 2014 that “every day, AWS adds enough new server capacity to support all of Amazon's global infrastructure when its was a $7B annual revenue enterprise”. He also shared that each AWS data center typically hosts 50,000 to 80,000 servers. That is a significant investment in the future of infrastructure and platform services.

Supporting an infrastructure that size requires the talent of highly skilled workers. According to a report released by IDC in 2012, there will be an increase of nearly 14 million jobs worldwide to support Cloud Computing by the end of 2015.
These jobs include developers, DevOps engineers, system administrators, account representatives, and many more. Gaining the skills necessary to acquire and keep these jobs will require the proper resources.


This is where Cloud Academy can help. Every week we are releasing new videos, labs, and articles covering many SaaS, IaaS, and PaaS offerings in depth. Our content gets straight to the point to give you quick, digestible, and useful pointers.
Along with this content, we provide quizzes to help prepare for certification exams. The quizzes come directly from each service's documentation and cover a broad range of topics. With the pace of innovation these days, it is vital to keep up with the latest advances and trends.
Cloud Academy is a terrific resource to continue your Cloud education.