How is the cloud built and how does it work?

Cloud infrastructure

Cloud infrastructure is the hardware resources required to support the cloud services that are provided and typically includes server, storage and network components. It’s commonly addressed as utility computing and on-demand computing and characterised as offering pay-per-use and pre-paid options.

Most cloud computing is hosted in massive data centres which are more efficient in delivering computing resources than small ones: high quality at a reasonable price. The downside is that if a cloud service or data centre that usually has millions of customers stops operating, then the impact is significant too.

A woman standing between two computer server racks
A woman standing between two computer server racks

Data centres

A data centre is "a facility composed of networked computers and storage that businesses and other organisations use to organise, process, store and disseminate large amounts of data". They are a critical asset for organisations’ daily operations. Data centres are costly to build and consume vast amounts of energy: the servers and the network are always on and so are the ventilation and cooling systems.

Some companies opt to host their workloads across various locations where most of their users are located, to offer faster services and minimise latency (delay), which is very important for example in gaming, trading, video communications and video streaming.

The whole business of cloud computing for enterprise is meant to address the limitations of on-premise data centres and computers. Providers that offer cloud computing services take care of the overhead maintenance of their data centres and make sure that you have infinite data storage and computing power at your disposal for your growing needs.

Edge Computing

Most cloud computing is, at the moment, taking place in large data centres. However, these data centres can at times be very far from the devices that require their use, causing a lag delay known as latency, due to the time it takes for the data to travel over the internet. One proposed solution to this problem is known as "edge computing".

Each smart device we own contains computing capacity that is very often under-utilised when not in operation. If you own a SmartTV, a laptop, a smartphone, and a smart watch, the odds are that there are many hours in the day when you are not utilising the computers inside all of those devices. Likewise, with your neighbours and local businesses. Edge computing is a new method of cloud computing that makes it possible for data to be processed by these "sleeping" smart devices. This will mean we will get access to this unused compute power closer to the source which would make it faster and more energy efficient.

Energy-efficient and reliable edge and cloud infrastructures will be crucial for sustainable innovation. All computing takes energy. The more we can cut down on these energy requirements, the more sustainable our computing practices will be.

Deployment models

There are three types of cloud deployment models: a cloud can be private, public, or a combination of both called hybrid.

  • Public cloud services are available to anyone on the open internet. The cloud provider owns the hardware (servers), and the usage is shared by different companies.

  • Private cloud services can be a proprietary network or a data centre that provides hosted services to a defined number of people, with specific access and permission settings. A single organisation exclusively uses the cloud infrastructure. It could run on-premises (at the organisation’s office) or owned, managed and operated by a service provider.

  • Some organisations mix both of the above. Hybrid cloud computing enables organisations to host confidential or critical workloads on-premises (private cloud) and use a third-party public cloud provider for less sensitive operations, such as test and development workloads. This model is widely used for big data purposes: you store the data in your office, but run analytical queries in the public cloud.

Whether private, public or hybrid, the purpose of cloud computing is to provide easy, scalable access to computing resources and IT services.

Types of services: IaaS, SaaS and PaaS

The three major cloud computing offerings are: infrastructure as a service (IaaS), platform as a service (PaaS), and software as a service (SaaS). They are based on the three layers in a computing stack – infrastructure, platform and applications.

Platform typeCommon examples
SaaSGoogle Apps, Dropbox, Zoom, Salesforce CRM, Cisco WebEx, Concur, GoToMeeting, Office 365, Quickbooks, Xero
PaaSAWS Elastic Beanstalk, Heroku, Force.com, Google App Engine, Apache Stratos, OpenShift
IaaSDigitalOcean, Linode, Rackspace, AWS EC2, Cisco Metapod, Google Compute Engine (GCE)
  • In an infrastructure as a service model, users can obtain infrastructure and physical computing resources such as servers, networking, storage and data centre space – without having to own, manage or operate them physically.

  • In a platform as a service model, users get access to the hardware and software tools – normally those required to develop and deploy applications to users over the internet.

  • Software as a service is a software licensing and delivery model in which software and applications are centrally hosted and licensed on a subscription basis, and sometimes also referred to as "on-demand software."


The high scalability and flexibility that SaaS platforms offer enables your users to access your content/services anywhere over multiple platforms, like web browsers, tablets and mobile devices without large-scale infrastructure.

A big market adoption has been driven through the demand for customer relationship management (CRM) applications, accounting management and enterprise resource planning (ERP) that offer pay-per-use subscription models. The increasing usage of AI, machine learning, big data and analytics software will drive an increase in SaaS usage.

The information communication technology sector is embracing public cloud platforms offered by the top cloud providers AWS, Microsoft and Google to better manage their rapid growth and complex infrastructure.

The retail and e-commerce sectors are also using the IaaS model to manage website traffic and deliver a smooth shopping experience through mobile platforms and tablets. Another benefit that cloud computing technology offers is to improve business intelligence by harnessing customer data. Some common practices for physical shops to enhance the customer experience are interconnected points of sale (POS) and centralised invoicing through the cloud.

Cloud computing services

Cloud computing services include a comprehensive offer, from the basics of storage (such as photos, videos and documents), networking and processing power to run standard office applications (Gsuite, Microsoft365), to more demanding technologies such as artificial intelligence. Most services that don’t require the user to be physically close to the computer hardware being used can now be delivered via the cloud, saving a lot of money and the necessary hardware it would require to run the same services in the home or office. It is faster, cheaper and more flexible than conventional computing methods.


The key emerging technologies at the moment, like artificial intelligence, the Internet of Things, blockchain and big data work with enormous amounts of data and require large storage space and computational power to provide their functions. The cloud is essential for deploying these technologies since it offers all this computational power affordably by providing pay-as-you-go options (the utility model). It is crucial to empower a competitive and innovative European economy in the digital age.

Skills needed and job opportunities

The demand for cloud computing skills is on the rise as more and more companies are adopting cloud services. Roles required in this field are varied and include a mix of project management, data science knowledge and specialised technical skills. These include database management, development, security, cloud adoption plans, cloud application design and cloud management and monitoring.

Qualifications listed for open positions in the sector include a strong understanding of cloud computing technology and infrastructure as well as experience designing and migrating applications to the cloud. Experience in a consultant role might be required, as they need to build relationships with customers and team members.

Key technical skills for cloud professionals include:

  • Database skills: Storing, managing and accessing data stored in the cloud is a vital part of any cloud-based strategy.

  • Cloud-hosted software enables rapid and incremental developments to be deployed much more frequently, requiring DevOps (development + operations) professionals whose cross-functional skillset ensures smooth deployment of developed software

  • Information security: Cybersecurity and preventive measures are important in cloud computing.

  • Networking skills: Network integration with cloud services is essential.

  • Programming skills: Proficiency in programming languages like PHP, Java and .NET are essential. Traditional programming languages such as Python and Ruby are also in demand.

Next section
III. How do we use the cloud?