The term 'Cloud Computing' is a technology wherein dynamically scalable and usually virtualized computing services are provided to users over the internet.

Before cloud computing, conventional business software applications such as those provided by SAP, Microsoft, and Oracle have always been beyond the reach of small businesses because of their prohibitive cost and complexity. Only large companies can afford them since such applications often need an in-house team of experts for set up, configuration, and maintenance.  Furthermore, they usually need a data center that requires office space, expensive computer hardware, and utilities to run.

Cloud computing technology allows these expensive business software to be run on a shared datacenter, so that third-party users can use them on a 'sharing' basis.  Aside from running the software, the cloud computing service provider also takes care of maintaining the cloud computing infrastructure, freeing up its users from worrying about running the systems themselves.  Thus, through cloud computing, these computer applications have become available to small businesses at much lower costs than if they were to buy their own software and maintain their own systems to run them.

Since cloud-computing is internet-based, cloud computing services may be accessed through ordinary web browsers. Aside from the application software itself, user data are also stored in the cloud computing infrastructure - a feature that some potential users do not favor. Many companies don't feel comfortable storing their data in other companies' systems, and justifiably so.

This is why data security is one of the major concerns with cloud computing, and perhaps one of the main reasons why large companies would rather have their own internal data systems than avail of cloud computing services. Still, cloud computing security has continued to improve over the years, making cloud computing a very attractive option for businesses that can't afford their own systems.

Cloud computing infrastructure involves a 'cloud' of many servers that deliver the required services to whoever wants to use them, so they are designed to be very scalable, i.e., users can increase their cloud computing limits quite easily.  To avail of any application in a cloud computing system, a user simply logs in and customizes the application for his own use, and then he can start using the application. For this convenient use of applications, the user just needs to pay a predictable monthly subscription fee to the cloud computing provider.

Services provided by cloud computing companies are primarily divided into three classifications:  1)  Infrastructure as a Service (IaaS);  2)  Platform as a Service (PaaS); and 3) Software as a Service (SaaS).

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