Let us consider a company that runs a lot of its applications such as CRM, Emails and ERP, on its privately-owned server. This server was put together by experts to meet the specific applications and needs, and to fit a certain budget. Server costs can range anywhere between $12000 and $200000. Let us look at two scenarios:

Scenario 1:

After constructing this “datacenter”, and using it for a few months, the company decided to scale-up and introduce a new division with new needs and new applications to be used. The new applications are in addition to the old, and cannot be supported by the existing server; so they have to buy new hardware and set up the appropriate software on it. This means high capital cost and the cost of employing more IT teams. Could the company scale their operations without incurring the high cost?

Scenario 2:

The company has to meet a sudden demand during high-sales periods. A simple example is the number of transactions that go through Amazon.com on Christmas or Prime Day vs. the number of transactions on a normal weekday afternoon. If the company purchased enough hardware and maintained a data center that could serve this intermittent peak demand as well as regular demand, their data center capital cost and operational cost would be huge, and money would be wasted because most of the data center will end up useless during normal days where demand is lower than peak. Can the company avoid having the account for their peak demand or burst needs without having to own a large datacenter that is underutilized most of the time?

Cloud computing does exactly that. It gets rid of the barrier of high initial capital cost by enabling companies & individuals access data center resources on-demand without having to own and operate the data center.


Why use Cloud Computing?

Reasons to delegate your data center infrastructure to cloud providers include:

  • Easy to scale up and down resources

  • Lower costs since users don’t own the hardware (public clouds)

  • Higher efficiency since users use only the resources they need at a time

  • Faster deployment and ROI since cloud can be considered as a plug-and-play option

  • Better performance since cloud providers use state of the art hardware and software in their datacenters

  • Cloud providers introduce polices and protection for users & their data, which results in higher security & safety.


How is Cloud Computing Used?

Cloud services are delivered by cloud providers and used by end-users in three ways:

Infrastructure as a Service (IaaS)

Example: Amazon Web Services, IBM Cloud
Cloud Service Provider (CSP) provides the hardware infrastructure. Customer has to take care of all of the software deployment as per their requirements.

Platform as a Service (PaaS)

Example: Amazon Web Services, Databricks, UnitX
Cloud Service Provider (CSP) provides the hardware infrastructure + middle-layer software in which customers can build new applications of their own.


Software as a Service (SaaS)

Example: Google Docs, Dropbox, AirBnB
Cloud Service Provider (CSP) provides a software application to the customer along with the hardware infrastructure. Customer uses the application.


Pizza-as-a-service show exactly how cloud delivery methods are implemented in the cloud



Technical Details: What Makes a Cloud?

In a very simple way, cloud providers lease their hardware to cloud users so that they achieve their computing goals in a cheap, scalable way.

There is a set of characteristics must be met by any Cloud Service Provider (CSP):

On-Demand Self-Service

To be able to start serving people (or ourselves) with the computing resources they have, CSP needs to make sure that resources can be reserved and released exactly as needed by the user of the cloud.

Broad Network Access

CSP should make sure that computing resources are accessible over a high-speed network.


CSP should be able to charge for cloud service, based on usage. In other words, CSP should be able to measure the use of the cloud using some payment model and enable users to shift their capital expenditure (CAPEX) to IT operational expenses (OPEX) in a pay-per-use fashion. This flexibility is one of the main reasons enterprises migrated to the cloud in the last few years.

Elastic Applications

It is normal for users to have different needs at different times. Therefore, CSP needs to make sure that multiple users can use their cloud at the same time by using elastic applications that free resources as they become underutilized. This allows the CSP to exploit economies of scale in the scope of cloud computing.


Cloud Services Characteristics [source]

Looking to learn more about migrating to the cloud and digitally transforming your enterprise? Visit us at www.unitx.tech to learn more about the multi-cloud platform from UnitX.

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