This article was first published in 2012 but has been updated in 2020.
There is probably no other concept facing the IT-industry that is more hyped than Cloud Computing. Some say it will totally disrupt the industry, which very well may be the case, but in our eagerness to support the hype, it is important to break cloud computing into the concrete parts of which it is built.
Cloud computing is a business model and not technology. That means there is no breakthrough hardware or software technology that suddenly has made cloud possible. Rather it consists of well-known technologies and concepts, put together in a new way. These technologies are known as layers. By adding them all together we get the package that enables cloud.
Let’s take a look at the different layers of cloud computing:
Infrastructure as a Service (IaaS)
The basic layer of cloud is the infrastructure –IaaS (Infrastructure as a service). This layer is basically hardware and network. What distinguishes this from a regular server or hosting company are mainly two things: scalability and virtualisation.
What is most important is scalability. The true IaaS vendors are scaling their IaaS layer into such huge quantities that the marginal cost of adding more GHz, GB, storage, and so on, are converging towards zero.
One of the first services where this was seen was in Gmail, the Google email service where each user gets around 8 GB of free storage. In order to do this, Google built gigantic data centres consisting of (probably) millions of servers.
The second difference from traditional hosting is virtualisation. This is a piece of software that virtualises all the hardware. Virtualisation lets the IaaS vendor utilise their computing resources to as high as 90 %, compared to an individual company having their own servers idle most of the time.
You might also be interested in reading: Cloud basics: Deployment models.
Platform as a Service (PaaS)
The second layer of the cloud is the platform – the PaaS (Platform as a service). The platform layer provides resources to actually build applications. In combination with IaaS, PaaS provides the ability to develop, test, run, and host applications.
The platform layer opens up for third parties to add their software (or integrations) to a cloud service. An example of a well-known PaaS is Microsoft Azure. This platform provides developers with swift access to a full development and deployment environment and even let you host the application you are building.
Software as a Service (SaaS)
The third cloud layer is the actual Software – the SaaS (Software as a service). SaaS has been used for many years, but in a Cloud setting, it is the layer in which the user consumes the offering from the service provider.
The SaaS layer must be web-based and hence accessible from everywhere and preferably on any device. The key is to understand that it makes no sense to ask whether a service is cloud or SaaS, as SaaS is a layer in the cloud stack.
On the other hand, it is important to understand that cloud is much more than SaaS, due to the other layers that bundled together makes out the whole cloud stack.
Business Process Outsourcing (BPO)
The top layer of the cloud is Business Process Outsourcing (BPO). As BPO certainly is not technology, there are discussions about whether BPO can be regarded as a cloud layer. But, as mentioned in the beginning of the article, the cloud is all about business models, not technology.
Whereas the other layers of the cloud are concerned with consuming services from a vendor, BPO is about outsourcing services to a vendor and hence the same logic applies as the other layers.
The layers are only a fraction of what cloud is about, but it is important to understand this concept as it is the core of cloud computing.
The picture shows the stack of layers.
Want to read more about what cloud computing is, typical use cases, and benefits? Visit our cloud technology topic page