What is Cloud Computing? Definition & 4 Types for Your Business

Modern businesses collect more data than ever — so much so that traditional, on-premises computing infrastructure can’t keep up. In response, companies across nearly every vertical are sunsetting on-premises solutions in favor of cloud computing frameworks.

If you’re gathering data, you’ve likely considered doing the same. But first, you must decide which framework matches your organization’s needs.

With that goal in mind, we’ll examine the four main cloud computing types:

• Private clouds
• Public clouds
• Hybrid clouds
• Multiclouds

In this guide, we’ll explore the pros and cons of each cloud computing type so you can identify the right approach for your business. We’ll also explore cloud services that provide organizations with scalable software solutions, infrastructure, and robust computing platforms.

What is Cloud Computing?

Cloud computing is a process that delivers computing resources and services on demand via the internet. Typical cloud computing services include data-management tools, applications, storage space, and virtual servers.

Under the on-premises model, all servers and other hardware are stored at your facility. With cloud computing, a third-party cloud services provider houses equipment at its data center, which you access remotely.

There are several different cloud computing types, all relying on a pay-as-you-go model. In other words, you only pay for the services, storage capacity, and resources you use. If you need additional capacity, you pay more; if you use less the next month, your bill goes down.

With such a high degree of scalability, it’s clear why this model is so appealing to businesses with dynamic data needs.

4 types of Cloud Computing

As mentioned, there are four core cloud computing types, each with its own benefits and potential drawbacks. We'll outline these four approaches and their notable pros and cons to help you find the ideal cloud computing model for your organization’s IT needs.

1. Private Clouds

Private clouds provide IT infrastructure and services to a single organization or user. The supported business doesn’t compete with third-party entities for resources or storage capacity. 

This type of cloud can be divided into two sub-categories:

• Managed private clouds: Managed private clouds are operated by a third-party entity providing on-demand digital infrastructure and remote access to IT hardware, including servers. 
• Dedicated clouds: When a public cloud's entire IT infrastructure is allocated exclusively to one customer, that cloud transforms into a private cloud. 

There are two key benefits associated with private clouds:

• Advanced data security
• Improved disaster recovery and governance capabilities

That said, they also present some drawbacks, namely:

• High initial set-up costs
• High maintenance costs

Private clouds provide advantages over on-premises computing infrastructure. However, they’re far more expensive than any other infrastructure model, which is why only enterprise-grade entities use private clouds.

2. Public Clouds

Third-party vendors manage public clouds and provide remote access to on-demand computing resources for multiple clients. All clients share the costs associated with maintaining the cloud, and each entity is charged based on their consumption, yielding lower costs and fairer pricing for all.

Amazon Web Services (AWS), Google, and Microsoft Azure are three of the best-known public clouds. The advantages of publicly-accessible cloud computing options include:

• Easy scalability and maintenance
• Low costs

Meanwhile, potential disadvantages of public clouds include:

• A lack of control over computing infrastructure
• Higher security risks compared to private clouds

Despite the possible drawbacks, public clouds are a valuable asset to small and medium-sized businesses that need affordable, scalable resources.

3. Hybrid Clouds

Hybrid clouds integrate public and private cloud features into a unified IT infrastructure. Multiple vendors collaborate to provide access to an exceptionally scalable, flexible, and cost-effective cloud environment. The hybrid cloud model was created to make private cloud benefits more accessible while keeping client costs low.

The benefits of hybrid clouds include:

• Enhanced data security
• Increased flexibility
• Reduced IT infrastructure costs compared to on-premises or private cloud options

The disadvantages of hybrid clouds include:

• High operational costs due to the complexity of the IT environment
• Difficulties transferring data from hybrid environments to private or public environments

Hybrid clouds have become popular among organizations with greater cybersecurity concerns that can’t afford a private cloud.

4. Multiclouds

The terms “multicloud” and “hybrid cloud” are sometimes used interchangeably, but they represent distinct services. Hybrid clouds combine features from private and public cloud environments; conversely, multiclouds combine multiple public clouds to create a more expansive and scalable infrastructure.

Multiclouds provide some distinct advantages over traditional public clouds, such as:

• Smoother operational flow
• Access to services from multiple cloud computing vendors

The drawbacks include:

• Bottlenecks created by inconsistent operational processes between vendors
• Increased security risks owing to the number of parties involved

Which Type of Cloud Should you use?

Due to each cloud computing type’s unique benefits and disadvantages, identifying the best solution takes careful consideration. Weigh these factors when exploring potential cloud computing solutions for your organization:

• Cost
• Technical features
• Governance
• Service management
• Data security

Due to their enhanced security, private or hybrid clouds are typically the best fit for tightly regulated industries, such as healthcare, law, and finance. Public or multicloud infrastructure likely provides the best value if your company doesn't store sensitive client data.

Multiclouds are also a good fit for large organizations that need access to vast computing resources but want to avoid the expense of a private cloud.

3 Cloud Service Types

Once you’ve selected the appropriate cloud computing type for your business, you’ll need to invest in cloud services. Here are the three most popular varieties:

1. SaaS: Software-as-a-service is a cloud-based delivery model that provides on-demand access to applications and software on a monthly or annual subscription.
2. PaaS: Platform-as-a-service gives your business the required IT infrastructure to run and manage your applications.
3. IaaS: Infrastructure-as-a-service offers your organization networking, storage, and computing resources.

SaaS, PaaS, and IaaS resources are delivered remotely on demand. Providers typically charge a monthly or annual licensing rate plus consumption-based fees. In return, they maintain the technology — fixing bugs and glitches, issuing updates, and releasing new features.

Tap into the Cloud with EDI Technology

Choosing the right cloud computing type for your organization’s needs will undoubtedly help your business thrive. However, it’s vital to pair your scalable digital resources with robust IaaS, PaaS, and SaaS solutions so you can overcome your greatest pain points and achieve your growth goals. Additionally, you need an electronic data interchange (EDI) solution to bring all your data and documents together. Enter Orderful.

Unlike legacy solutions, Orderful EDI is delivered via a modern cloud-based SaaS model. This approach allows us to offer a streamlined implementation process and superior EDI functionality so you can regain control of your data. Contact us today to speak with an Orderful EDI expert and learn more.