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What is the Cloud? The Basics

Finance
Article
08/20/2015

When it comes to computing, the cloud doesn't have much to do with its wispy, ethereal counterpart. Essentially, it's a network of servers located off site, accessed through the internet. Sometimes confused with the internet itself, the cloud is really just one part of the exponentially growing whole, only becoming available to users in the late 2000's with products such as Microsoft Azure, OpenStack, and IBM SmartCloud. The concept was driven by the need to develop a platform to bring together consumers of computer services with those who sell them. There are currently hundreds if not thousands of cloud service providers offering computer processing and storage options from the simple and free of charge to much more complex and costly services.

How does the cloud work?

Simply put, a computer user can subscribe to a cloud service and send copies of files to the service provider, where they are recorded and stored on the provider's servers. Later, the user can access and retrieve the files by either downloading them or by accessing and manipulating the files on the servers. Most of us use the cloud every day without even realizing it through the use of applications such as Gmail for email, Flickr for storing and publishing photos, Facebook for social media, and YouTube for posting and downloading video.

How is the cloud hosted, and where is my data stored?

When using the cloud, your data is stored on servers maintained by the hosting company, and those servers could be located be anywhere in the world. Cloud hosting often involves the use of many computers sometimes referred to as server farms — a group of many hard drives connected together providing incredible capacity — although it can also be done with as little as one server and a connection to the internet. Large-scale cloud hosting uses enough servers and equipment to fill a warehouse, typically called a data center.

How is the cloud used?

In addition to simple tasks such as email and file storage, cloud computing allows the use of software as a service. In the past, users had to purchase software, load it onto their computers or download it to their computers from the internet. The software needed to be maintained, upgraded, secured, and backed up by the user. When using the cloud, the software is maintained by the cloud service provider rather than the user. Users pay a monthly fee for a variety of services and can avoid some of the cost of traditional software, such as the initial purchase, installation, upgrades, routine backups, and disaster recovery plans.

These services can greatly improve business continuity and security of data, and they offer the ability to access software and records from internet connected devices such as laptops, desktops, tablets, and mobile phones. That gives you greater flexibility, including the possibility of creating a fully mobile office.

This website contains articles posted for informational and educational value. Paychex is not responsible for information contained within any of these materials. Any opinions expressed within materials are not necessarily the opinion of, or supported by, Paychex. The information in these materials should not be considered legal or accounting advice, and it should not substitute for legal, accounting, and other professional advice where the facts and circumstances warrant.
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