Cloud basics – the Layers

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 eager to support the hype, it is important to break Cloud down into the concrete parts of which it is build. In this article we will explore the fundamentals of Cloud – the Cloud Layers.

Cloud computing is a business model and not at 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.


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. First of all it is the scalability. The true IAAS vendors are scaling their IAAS layer into such huge quantities that the marginal cost of adding more GHz, GB, storage etc., is converging towards zero. One of the first services where this was seen was 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 virtualization. This is a piece of software that virtualizes all the hardware. Virtualization lets the IAAS vendor utilize their computing resources to as high as 90 %, compared to an individual company having their own servers idle most of the time.


The second layer of 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 3. 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 swift access to a full development and deployment environment and even let you host the application you are building.


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. But 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.


The top layer of the Cloud is BPO (Business Process Outsourcing). As BPO certainly is not technology, there are discussions whether BPO can be regarded as a Cloud layer. But, as mentioned in the beginning of the article, Cloud is all about business models, not technology. 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.