The Cloud for Beginners: 10 Terms Demystified

Cloud computing concept

Despite concerns about security and privacy, there has been a steady increase in the adoption of cloud computing by businesses over the last few years. Companies are seeing lower cost and greater efficiency associated with cloud services. And as businesses become more comfortable with the concept, continually evolving technology and increased software integration options make cloud solutions even more attractive.

Some popular software packages are abandoning desktop versions as they make their services available exclusively in the cloud, signaling greater confidence in the widespread adoption of cloud computing by the tech industry.

There’s no question that “The Cloud” is here to stay.

But there’s no need to panic if you’re not sure if cloud computing is right for your small business. You have time to review your options and even test the waters with low risk cloud offerings.

Over the next few months, I’ll be doing a series of “Cloud for Beginners” posts to help small business owners understand and take advantage of all the cloud has to offer.

In today’s post, I’ll help you take the first step to learn more about what the cloud can do for your business.

If you’re thinking about moving your applications and data online, you can start your journey by doing some research to find the best solutions for your business. The problem is, you’ll likely be bombarded with so much technical jargon in the process that you’re left with a headache and still unsure of how to move forward.

The cloud has a lot of benefits and features, especially for small and medium-sized businesses, and the trick to leveraging them is to have a clear understanding of how they work.

Here’s a quick run down of some of the cloud tech speak you may run into while you’re studying up:

The Cloud

Yes – we’re starting off with the basics. The cloud is the Internet. In the context of cloud computing, it ‘s a series of servers that are specialized for different functions, like storage, running applications, and/or collaborating with others. If you’ve checked your email online, you’ve used the cloud. See? You’re already halfway there. Sort of.

SaaS (Software as a Service)

One of three service models, SaaS offers businesses access to applications online, like Microsoft Office Online or Adobe Creative Cloud, instead of from a desktop computer. This helps save time and money because businesses don’t need to purchase, install and update software. It also makes the apps available from any location with an Internet connection – which is great for road warriors. Other popular examples of SaaS include Salesforce and Google Apps.

PaaS (Platform as a Service)

The next level of the service model is PaaS, which allows organizations to rent and manage the hardware, operating systems, storage and network where SaaS based software runs. This saves on costs associated with purchasing and installing hardware, as well as allocating space for equipment.

IaaS (Infrastructure as a Service)

The third level of the service model gives managers control of their platforms, but leaves the management of hardware and data centers to the IaaS providers.

Consumption-based price model

With consumption-based pricing you only pay for the amount of resources you use, such as CPU time, disk space and network. This ensures you’re not overpaying for services or capacity you don’t need.

Subscription-based price model

A subscription based model offers the service for a period of time – usually on a monthly basis – and typically allows for unlimited usage during the subscription period. One benefit of subscription pricing is a fixed monthly cost.

Advertising-based price model

This model offers no or low-cost cloud computing services that feature advertisements, and can be ideal for small startups with a limited budget.

Cloud Portability

Portability is a feature that gives users the ability to move applications and data across different cloud providers, and private and public clouds.


Scalability is the ability to grow or scale back cloud resources, like processing and memory, as you anticipate needs. This helps ensure you’re not paying for more than you need, but requires some level of planning.


Allowing the system to handle sudden and unanticipated loads, elasticity offers the ability to temporarily add more resources, like databases, CPU and cache, when needed, and release them when the need is gone. Elasticity allows for a more agile system than scalability.

We’ll talk more about these terms and others in upcoming posts, so subscribe to our blog for updates. And let us know what cloud features or benefits you’d like to know more about.