What cloud computing is

Cloud computing is the delivery of computing services — including servers, storage, databases, networking, software and analytics — over the internet ("the cloud"). Instead of buying and managing physical hardware, organisations rent computing capacity from cloud providers, paying for what they use. This shifts capital expenditure (buying servers) to operating expenditure (paying for usage), and allows capacity to scale up and down with demand.

The three service models

Infrastructure as a Service (IaaS): the provider manages the physical infrastructure (servers, networking, storage); the customer manages the operating system, middleware and applications. Used by: businesses building custom applications. Platform as a Service (PaaS): the provider manages the infrastructure and operating system; the customer manages applications and data. Used by: developers building applications without managing underlying infrastructure. Software as a Service (SaaS): the provider manages everything; the customer simply uses the software. Examples: Microsoft 365, Salesforce, Google Workspace.

The major providers

Amazon Web Services (AWS), launched in 2006, is the largest cloud provider with around 31-33% market share. Microsoft Azure is second (around 22%), with particular strength among enterprises already using Microsoft software. Google Cloud Platform is third (around 12%), with strengths in data analytics, machine learning and Kubernetes. The three collectively dominate, though significant players including Oracle, IBM, Alibaba Cloud and smaller specialists compete in specific niches.

Key considerations for businesses

Cloud migration is not universally cost-saving — for stable, predictable workloads, on-premises infrastructure can be cheaper than cloud over time. Security responsibility is shared: cloud providers secure the infrastructure; customers must secure what they build on top of it. Vendor lock-in is a genuine risk — applications built on proprietary cloud services may be expensive to migrate. Data sovereignty (where data is physically stored) matters for regulated industries.