[Infographics] How Does Cloud Computing Work? Different Cloud Models Explained

What is Cloud Computing?

The process of storing, managing, and processing data on a network of servers hosted on the internet instead of a local server or a personal computer is known as Cloud Computing. The cloud computing industry is expected to be worth an astounding $ 623.3 billion by 2023.

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How it Works

Whenever a user makes a service request, for example, a storage request, database access request, or a computing request, the request is sent to the API gateway. An API gateway is a service provided by the Cloud Provider used to create, publish, maintain, monitor, and secure REST, HTTP, and WebSocket APIs.

It provides a simple interface to a more complex system, that includes the servers and the databases, along with other services. The user can then execute the request and access servers and databases. Hence, through cloud computing, the user can work on their company’s servers from anywhere in the world.

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Different Cloud Service Models

Cloud service models are divided into two types, deployment models and service models. A cloud deployment model reflects a particular kind of cloud system, characterized mainly by ownership, size, and access. A service model enables companies to offer services to other companies.

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Deployment Models

  •   Private Models: In private models, computing services are provided either over the internet or a private internal network and only to select users.
  •   Public Models: In public models, computing services are provided by third-party providers over the public internet, making them available to anyone who wants to use or purchase them.
  •   Hybrid Models: It is a computing environment that combines a public cloud and a private cloud by allowing data, applications, and services to be shared between them.

Service Models

  •   SaaS (Software as a Service): Software as a service uses the internet to distribute third party vendor-managed software to its customers. Using SaaS apps tends to reduce software ownership costs by removing the need for technical staff to manage software installation, management, and upgrades, as well as reducing the licensing software costs. Some examples are Email, CRM, Collaborative, and ERP.
  •   PaaS (Platform as a Service): It provides certain software with a platform. PaaS provides developers with a framework that they can build on and use to create custom apps. It is used for application development, decision support, web, streaming, etc.
  •   IaaS (Infrastructure as a Service): IaaS is a way to deliver cloud computing infrastructures such as servers, storage, network, and operating systems. Through any cloud computing platform, customers can access those resources. Application development, decision support, web, and streaming are some examples

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Cloud Deployment Models

You might be wondering how does cloud computing work. Now, cloud computing offers various deployment models to suit different business needs. Understanding these models is crucial for organizations considering cloud adoption. Here are the key aspects of cloud deployment models:

  • Public Cloud: The public cloud deployment model involves hosting services and infrastructure on shared resources accessible to the general public over the internet. It provides scalability, and cost efficiency and reduces the need for upfront investments. However, users have limited control over the underlying hardware and software. Popular public cloud providers include Amazon Web Services (AWS), Microsoft Azure, and Google Cloud Platform (GCP).
  • Private Cloud: The private cloud deployment model involves dedicated resources that are exclusively used by a single organization. It offers enhanced security and customization options, making it suitable for sensitive workloads. Private clouds typically require higher upfront investments for infrastructure and maintenance. Examples of private cloud solutions are OpenStack, VMware vSphere, and Microsoft Azure Stack.
  • Hybrid Cloud: The hybrid cloud deployment model combines both public and private cloud resources, allowing organizations to leverage the benefits of both. It offers flexibility, scalability, and cost optimization. Organizations can seamlessly move workloads between public and private environments to ensure optimal resource utilization. Proper integration between public and private cloud components is essential for efficient hybrid cloud operations. Examples of hybrid cloud solutions include Azure Hybrid Cloud, AWS Outposts, and Google Anthos.
  • Community Cloud: The community cloud deployment model involves shared resources accessible to a specific community of organizations with similar interests or requirements. It allows organizations to share costs, enhance collaboration, and meet industry or regulatory compliance requirements. Examples of community cloud initiatives include government cloud services and healthcare information exchanges.

Cloud Networking

Once you have a clear idea about how does cloud computing work step by step, you would understand that cloud networking is vital in enabling communication between cloud resources, users, and external networks. Here are the key aspects of cloud networking:

  • Virtual Private Network (VPN): VPNs establish secure connections over public networks, enabling remote users to access cloud resources. They ensure secure communication, remote access, and site-to-site connectivity.
  • Load Balancing: Load balancing distributes incoming network traffic across multiple servers or resources to optimize performance and reliability. It improves scalability and high availability and uses intelligent traffic routing algorithms. Examples of load balancing services are AWS Elastic Load Balancer and Google Cloud Load Balancer.
  • Software-Defined Networking (SDN): SDN separates the control plane from the data plane, allowing for programmable and centralized network management. It enables network agility, centralized control, and network virtualization.
  • Inter-Cloud Connectivity: Inter-cloud connectivity establishes reliable and secure connections between different cloud service providers or data centers. It enables multi-cloud strategies, directs cloud interconnects and ensures low latency. Examples of inter-cloud connectivity solutions are AWS Direct Connect, Azure ExpressRoute, and Google Cloud Interconnect.

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Cloud computing provides many opportunities for a company: 

Comfort & Cost Reduction

It enables you to set up what is essentially a virtual office to give you the flexibility to connect anyplace, any time. With the rising number of web-enabled devices used in today’s business world, it is easier to access the data. If you opt for Cloud Computing for your business, you can save costs by using your cloud computing service provider’s resources, rather than spending on purchasing and maintaining costly systems and hardware.


Cloud-based solutions are held within very secure data centers where physical access is strictly controlled. Vast quantities of computing resources can be provided in minutes, usually with only a few mouse clicks, allowing companies a lot of flexibility.


Another benefit that Cloud Computing offers is Scalability. Your business can quickly expand or scale down your operation and storage needs, allowing flexibility as your requirements change. Your cloud computing service provider will do this for you, rather than purchasing and installing costly updates yourself. Using the cloud will free up your time, and you can continue to run your company.

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Also Read: Top 7 Cloud Computing Applications in Real World

Wrapping up

At upGrad, we offer the  Advanced Certification in Cloud Computing program.

Our course will teach you the basic and advanced concepts of cloud computing along with the applications of these concepts. You will learn from industry experts through videos, live lectures, and assignments. Moreover, you’ll get access to upGrad’s exclusive career preparation, resume feedback, and many other advantages. Be sure to check it out.

What is the advantage of the Software as a Service Model (SaaS)?

SaaS is an alternative to the software we generally use in a business environment. The top benefits of using the SaaS model begin with reduced time. Since a SaaS application’s installation is already done, it is considered over traditional methods. Next is low cost. SaaS operates in an environment that is either a shared or multi-tenant environment, which helps save cost. Moreover, scaling the customer base becomes a quick process since SaaS can accommodate small and medium businesses to work with software that they wouldn’t have been able to work with due to high licensing costs. Since the costs are split between the users using the SaaS model, maintenance cost is also reduced. SaaS solutions are built up in spaces where integration and scalability are achievable. There is no additional cost that one has to bear to add a server or software.

How can one identify if the cloud is good for their business or not?

First of all, identify whether your business needs cloud services or not. From an operational perspective, you will have the answer to it. Move further to find out the current cloud setup on SLA to gather the results. A cloud migration process can last for months, and therefore an estimated time frame will play a key role in the process. Several factors decide the duration of the migration such as the business’s size, total data needed for migration, and the number of applications that will migrate. Once an organization has details of all the factors mentioned above, cloud migration becomes hassle-free.

What is the disadvantage of cloud computing?

The disadvantages of cloud computing are very few; however, it could wreck your business if not considered. Selecting an unsuitable cloud operator service could prove detrimental to your business. Moreover, any enterprise using cloud computing services must know about the flexibility and availability of the cloud operations they are going to use. This is important to know about the organization's plan to engage with the operator.

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