263-3855-00: Cloud Computing Architecture
Section 2
Cloud Computing Services, IaaS, SaaS, and FaaS
Swiss Federal Institute of Technology Zurich
Eidgenössische Technische Hochschule Zürich
Last Edit Date: 02/20/2025
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The cloud in an economic context¶
The cloud has changed the economy of computing. Software and hardware used to be manufacturing products, bought and operated by the client. The cloud turns them into services: made available by a provirer, pay-per-user, ownership does not shift to the client.
Significant impliations for the IT industry:
The demand for computing infrastructure shifts to cloud providers
Requires huge capital investments to become a player (hyperscalers)
Less emphasis on standards and compatibility (specilization)
Hyperscalers: Amazon, Microsoft, Google, Alibaba, Baidu, Tencent, Meta, plus a bunch of smaller cloud providers.
The hyperscalers are very big, which donimate the server market and build their own hardware.
This has been a major shift in the IT market that is having a huge impact on how technology evolves.
Cloud economics for the user: CapEx vs. OpEx¶
Capital Expenses are investment. They become an asset of the company. Cost spread over time through depreciation.
Operational Expenses are cost. They are the price of doing business. Typically tax deductible.
The cloud turns what used to be capital expenses into operational expenses, changing the equation of the IT infrastructure.
The cloud has enabled many companies to scale to sizes that would have been difficult because of the upfront investment required.
Why is using the cloud cost-efficient?¶
For each individual user, resources are often underutilized (as low as 15%). But resources must be allocated and on, in case they are needed on short notice. Total cost of ownership (TCO) is very high compared to usage.
The cloud improves efficienty by letting users share resources. Resource utilization increases from the cloud provider perspective. Users pay only for the resources they use (conditions may apply).
However
The cloud as a service¶
| Traditional On-Premises IT | Colocation | Hosting | IaaS | PaaS | SaaS |
|---|---|---|---|---|---|
| Data | Data | Data | Data | Data | Data |
| Application | Application | Application | Application | Application | Application |
| Databases | Databases | Databases | Databases | Databases | Databases |
| Operating System | Operating System | Operating System | Operating System | Operating System | Operating System |
| Virtualization | Virtualization | Virtualization | Virtualization | Virtualization | Virtualization |
| Physical Servers | Physical Servers | Physical Servers | Physical Servers | Physical Servers | Physical Servers |
| Network & Storage | Network & Storage | Network & Storage | Network & Storage | Network & Storage | Network & Storage |
| Data Center | Data Center | Data Center | Data Center | Data Center | Data Center |
Black text means provider supplied, red text means self-managed.
From on-premise to the cloud¶
Simply put, the difference between on-premise vs cloud software is the location. On-premise software is installed and runs on a company's own hardware infrastructure, and is hosted locally, whereas cloud software is stored and managed on the provider's servers, and accessed through a web browser or other interface.
Infrastructure as a Service (IaaS)¶
Rent a virtual machine (scurely isolated partition of server) on-demand.
Equivalent to renting a server, enabled through virtualization:
Can rent a VM (actual computing node is shared)
Can also rent a dedicated server (virtualized but not shared)
Can also rent a "bare metal" server (neither virtualized nor shared)
Useful to those who need access to servers but can / want to build the rest of the stack themselves.
IaaS Examples¶
Amazon Elastic Compute Cloud (EC2)
- Many different instances