What’s a Cloud-Based System and How Does It Work?

A cloud-based system, often known as cloud computing, is a broad term for anything that involves the delivery of hosted services via the Internet.  A cloud can be either private or public. A public cloud sells services to anybody who has access to the Internet. 
What’s a Cloud-Based System and How Does It Work?

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A cloud-based system, often known as cloud computing, is a broad term for anything that involves the delivery of hosted services via the Internet.  

A cloud can be either private or public. A public cloud sells services to anybody who has access to the internet. 

A private cloud is a proprietary network or data center that provides services for a small group of individuals with limited access and rights. Cloud computing, whether private or public, aims to give easy access to computer resources and information technology services.

In 2017, the federal government shifted from a “Cloud First” approach to a “Cloud Smart” plan to expedite agency adoption of cloud-based solutions and enhance the speed with which their agencies adopt the new technology. The government is now often regarded as the most active user of cloud computing technologies.

What is a cloud-based system and just how beneficial can it be for your business? In this in-depth guide about cloud-based systems, we will cover what these systems are, provide some examples, explain what they are used for, and their benefits.

Brief History Of Cloud-Based Systems

History concept data, clients, server, database

The phrase “cloud computing” was first used in a Compaq internal document in 1996. The term “cloud” was first linked with the concept of distributed computing, which gained popularity at Apple-spawned General Magic in the early 1990s, with preceding references in academic work.

As computer technology costs decreased in the 1990s, a large number of personal computers were connected to networks. In 1999, Salesforce became the first company to offer software via the Internet, bringing in the era of Software as a Service.

Within three years, the business had dramatically expanded to include video, music, and other forms of material being housed and supplied online.

With the advent of UX design, non-technologists gained access to data that had previously been exclusively available to programmers and code literates.

By the mid-1990s, the phrase “the cloud” had already been used to describe this new digital realm. Google and Microsoft soon found themselves in a race to get a larger part of this virtual environment’s market share.

The cloud was suddenly ubiquitous, and the growth of PaaS (Platform-as-a-Service), SaaS (Software-as-a-Service), and IaaS (Infrastructure-as-a-Service) created a completely new sector: the cyber-security enterprise.

By 2010, nearly everyone was using the cloud for entertainment, healthcare, banking, and government.  A gold rush to join this new industry was underway. The cloud was causing a cultural change never before witnessed in human history. 

As knowledge barriers lifted and access to information grew more widespread and simple, great things began to emerge from the most modest of settings. Small businesses were reshaping the globe. Wealth was generated in faraway areas, and individual invention and ingenuity became the realm of the individual.

How Cloud-Based Systems Are Used Today

how cloud based systems work concept

As we continue to investigate how our new technology era is growing, the societal benefits of a cloud-based system are constantly revealed. This development is growing exponentially as ever more complicated applications are released from use in a single physical place. 

We have witnessed the evolution from floppy disks to zip drives, CDs (and data DVDs) to USB storage devices, and beyond. While Millennials feel the cloud belongs to them, the roots of non-local computing may be traced back to the early 1950s.

Public cloud solutions provide advantages such as cheaper prices, less maintenance, and nearly limitless scalability, but they are not a choice for enterprises in regulated industries due to their lack of rigorous data security and inability to meet compliance requirements.

This means, in much simpler terms, that as cloud technologies advance and more businesses migrate to cloud-based services, it is important to grasp the growing trends in the industry.

According to Forrester Research, the worldwide public cloud infrastructure market will grow by 35% to $120 billion by 2021 as the cloud continues to “take center stage” in the pandemic recovery.

Top Benefits Of Cloud-Based Systems

Benefits of a virtual based phone systems for remote workers

Businesses are moving towards the cloud for several reasons. Here are the top benefits of cloud-based systems:

1. Cost

A cloud-based system costs largely depend on the type of cloud service you need. The cost of cloud-based software is also determined by the industry for which it is designed. Other considerations that influence cost include the number of users, how the program will be launched and distributed throughout the organization, and priority tech-support choices.

According to Healthy IT, to purchase a server for your small practice, you should budget $1,000–$3,000 upfront, and to rent a cloud server, you should budget $100–$200 per month or even less. For many small companies, the decision is simple: rent.

If the concept of paying just for the quantity of storage you require in set monthly subscriptions appeals to you, go with cheap cloud storage. Cloud storage is also ideal if you don’t want to spend time thinking about hardware updates and upkeep.

2. Flexibility 

Cloud computing enables your employees to be more flexible – both within and outside of the office. Employees can access files via web-enabled devices, including cell phones, laptops, and notebook computers. 

The capacity to exchange documents and other data via the Internet can also aid in internal and external cooperation. Many workplaces are increasingly enforcing “bring your own device (BYOD)” rules. Cloud computing facilitates the use of mobile technologies in this fashion.

3. Performance

Cloud performance monitoring and testing solutions assist companies in gaining visibility into their cloud environments by assessing performance using particular metrics and methodologies. 

Efficient cloud performance is important for guaranteeing business continuity and providing access to cloud services to all relevant parties. This is true for both simple public cloud usage and complicated hybrid cloud and multi-cloud systems. 

Cloud performance metrics allow you to efficiently monitor your cloud resources and guarantee that all components smoothly interact with one another.

4. Security

Cloud security is essential for companies that are transitioning to the cloud. Security risks are always changing and becoming more complex, and cloud computing is no less vulnerable than on-premise systems. Working with a cloud provider that offers best-in-class security that is customized to your architecture is important.

A cloud-based system enables companies to operate at scale, cut technological expenses, and leverage flexible systems to gain a competitive advantage. Companies, on the other hand, must have total trust in their cloud computing security and ensure that all data, systems, and applications are safe against data theft, leakage, corruption, and deletion.

Cloud Computing Types: Public vs Private vs Hybrid Cloud Options

Cloud computing refers to a variety of categories, types, and architecture models. This networked computer paradigm has changed the way we work—you’ve probably already used the cloud. But the cloud isn’t just one entity.  Cloud computing may be divided into three broad categories:

  • The term “public cloud” refers to cloud computing that is supplied via the Internet and shared by several businesses.
  • Private cloud computing is cloud computing that is entirely dedicated to your company.
  • Any arrangement that employs both public and private clouds is referred to as a hybrid cloud.

Public Cloud

The cloud computing approach in which IT services are offered through the internet is referred to as the public cloud. The public cloud, the most common type of cloud computing service, provides a plethora of solutions and computing resources to meet the rising demands of companies of all sizes and sectors.

Private Cloud

Any cloud-based system devoted to a single business is referred to as a private cloud. Your company does not share cloud computing resources with any other company.

The data center resources may be located on-site or off-site and might be managed by a third-party provider. The computer resources are separate and provided over a secure private network; they are not shared with other clients.


Any cloud infrastructure system that incorporates both public and private cloud solutions is referred to as a hybrid cloud.

Organizations can employ private cloud environments for IT workloads while supplementing the infrastructure with public cloud resources to handle rare surges in network traffic.

Examples of Cloud-Based Systems

Examples of cloud based systems

Software-as-a-Service (SaaS)

Software-as-a-service is arguably the most well-known application of cloud computing (SaaS). In essence, SaaS solutions disseminate data online and are available from any browser on any device, allowing those businesses to continue hosting the software.

SaaS is one of the most appealing areas in business and technology because of its simplicity of use, upfront, subscription-based pricing, and cheaper expenses. 


Salesforce, a well-known SaaS vendor, offers a CRM system that helps businesses manage customer connections and generate sales leads. The Sales Cloud blends artificial intelligence and customer data to assist deals teams in identifying prospective leads and more quickly closing sales. Distinct clouds are available for customer support and marketing on the platform.


Zoom is a cloud-based audio and video conferencing software platform that captures meetings and saves them to the cloud for users to view at any time and from any location.


Atlassian creates SaaS tools that assist organizations ranging from small enterprises to large corporations in streamlining workflow across departments and better-aligning employees to achieve goals.

Infrastructure-as-a-Service (IaaS)

Infrastructure-as-a-Service (IaaS) offers a virtualized computer infrastructure that is entirely managed over the Internet. IaaS is frequently used as a testing environment for app development, a website host, and even a platform for big data research. Because of its business continuity and speed in providing software, IaaS is becoming a popular cloud choice.


While the cloud-based system differs, most IBM IaaS servers can be set up in minutes to a few hours. The IT giant’s “bare metal servers” can support projects up to 3 gigabytes and can be deployed in a matter of hours. The “virtual servers” are ideal for scalable applications that demand flexibility and deploy in a matter of minutes.


Datrium is a firm that combines data management with cloud computing. The IaaS cloud from the firm has increased cybersecurity capabilities such as blanket verification, built-in data backup, and data security safeguards.


The Finix platform allows software companies, ISVs, and marketplaces to streamline the process of bringing payments in-house by combining gateway/tokenization, merchant onboarding, reporting, settlement, and chargeback tools and solutions into a single platform.

Platform-as-a-Service (PaaS) 

PaaS is a cloud computing paradigm that provides clients with hosted development kits, application management capabilities, and database tools — the virtual resources needed by enterprises to build, install and deploy software applications. Companies can save lots of money in the long run by outsourcing hosting, database security, and data storage.


Saggezza offers full-stack solutions to assist businesses in facing their most difficult issues, including consulting, UX, analytics, cloud, and IT optimization services to provide them with a competitive advantage through technology.


The Acquia Cloud was designed particularly for Drupal 8 sites and apps. The PaaS technology is developer-friendly, providing APIs, command-line tools, and connectors to help developers expedite their development workflow.


Heroku is a cloud app platform that allows developers to launch, grow, and manage their apps in many languages. Heroku’s PaaS versatility allows them to operate in languages such as Ruby, Java, Python, Perl, and others. Permitting developers to write in a familiar language, according to reports, speeds up app development.

Serverless Computing

Backend services may be provided on an as-needed basis using serverless computing. Servers are still used, but a company that employs a serverless provider for backend services is charged based on use rather than a set amount of bandwidth or number of servers.

Amazon Web Services (AWS)

AWS Lambda enables developers to run code for any application or backend service without the need for server deployment or maintenance. The pay-as-you-go approach grows with the business to meet real-time changes in data storage and consumption.


Slack is a team and company collaboration platform. Slack channels are simply grouped communications that may be arranged by individual, team, project, subject, and so on to ensure that everyone is able to communicate smoothly. 

A cloud-based system and SaaS provider also provides video conferencing and PDF file sharing, as well as connectivity with other cloud providers like Dropbox and Salesforce.


Reducing development time and server costs while simplifying the build process are aims that both business and IT teams share. HomeAway used Google Cloud Functions to create an app that allowed users to browse and comment on traveler suggestions in real time, even when no internet access was available. 

The cloud services provided by Cloud Firestore and Cloud Functions enabled the infrastructure to be set up in minutes and the app to be deployed in six weeks with only one full-time developer.

The Bottom Line

Certain factors should be weighed when selecting a cloud service provider. Though cloud-based systems are usually based on a pay-per-use approach, various providers frequently have pricing schemes that must be considered. 

Furthermore, if the cloud provider will keep sensitive data, the physical location of the provider’s servers should be taken into account.

The advantages of cloud computing extend beyond substantially reducing your paper consumption; cloud computing also adds to energy efficiency.

Moving to the cloud is not only more cost-effective, simple to deploy, secure, and productive, but it is also better for the environment. Cloud-powered workplaces that provide their employees with access to their programs and data at any time and from any location help reduce commuting-related carbon emissions.

Interested in discovering the Best Cloud-based Business phone systems of the year? Explore more in our latest blog! 

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