Cloud computing is the delivery of servers, storage, databases, networking, software, and other IT resources over the internet.
Instead of buying physical servers and running them in an office or data centre, a company rents computing power from a cloud provider. It can add resources when demand rises and reduce them when demand falls.
This model powers many products people use each day. Banking apps, patient portals, streaming platforms, online stores, email services, and business software often run in the cloud.
For a software company, the cloud is more than a place to host an app. It shapes how fast teams can release, how systems recover from failure, how costs grow, and how sensitive data is protected.
Code & Pepper provides cloud computing software development and consulting for companies building, moving, or scaling digital products on AWS, Azure, and Google Cloud.
What is cloud computing in simple terms?
Cloud computing means using IT resources through the internet instead of owning and maintaining all the hardware yourself.
Think of electricity.
A business does not build a private power station for every office. It connects to a wider network and pays for the energy it uses. Cloud computing applies a similar model to servers, storage, databases, software, and processing power.
A company can request a new server in minutes. It can store files without buying storage hardware. It can run a database without managing the physical machine beneath it.
The National Institute of Standards and Technology defines cloud computing through five core traits:
- on-demand self-service
- broad network access
- shared resources
- rapid elasticity
- measured usage
In practice, this means teams can request computing resources when they need them, access them through a network, scale capacity, and track what they consume.
How does cloud computing work?
Cloud computing works by giving users access to shared computing resources managed in remote data centres.
Cloud providers operate large groups of physical servers. They use software to divide those resources into virtual machines, containers, databases, storage services, and other products.
Users manage these resources through:
- web dashboards
- APIs
- command-line tools
- infrastructure as code
- software development kits
- automated deployment pipelines
A startup may create an AWS account, deploy an application, connect a managed database, add file storage, and serve users without buying one physical server.
The cloud provider manages the physical buildings, power, cooling, hardware, and core network. The customer still owns important work. That includes application code, user access, cloud configuration, data rules, monitoring, and security settings.
This split is called the shared responsibility model.
The provider protects the cloud infrastructure. The customer protects what they build and store in the cloud.
What are the main parts of cloud computing?
A cloud platform gives software teams access to several types of computing resources.
Compute
Compute resources run application code.
They include virtual machines, containers, serverless functions, and managed application platforms. A team can choose how much control it needs.
A virtual machine gives the team control over the operating system. A serverless function runs a small unit of code when an event occurs. A container packages an application with the files it needs to run.
Storage
Cloud storage holds files, backups, documents, images, videos, logs, and application data.
Different storage types fit different jobs:
- object storage for files and media
- block storage for virtual machines
- file storage for shared directories
- archive storage for long-term retention
A HealthTech platform may store medical documents in encrypted object storage. A FinTech product may archive transaction reports based on a defined retention policy.
Databases
Cloud databases store and organise application data.
Teams can use:
- relational databases
- document databases
- key-value stores
- graph databases
- time-series databases
- data warehouses
Managed database services reduce the amount of work needed to patch software, create backups, replace failed hardware, and scale capacity.
The team still needs to design the data model, control access, test backups, and plan recovery.
Networking
Cloud networking connects services, users, databases, and external systems.
It includes:
- virtual networks
- private subnets
- firewalls
- load balancers
- domain name services
- content delivery networks
- private connections
- gateways
Good network design limits what each service can reach. It also helps the product handle traffic without exposing internal systems.
Identity and access management
Identity and access management controls who can use cloud resources and what they can do.
A sound setup follows the principle of least privilege. Each person or service receives the access it needs, and no more.
This matters in regulated products. A developer may need access to logs but not production customer data. A support tool may need to show account status without exposing full financial or medical records.
Monitoring and observability
Cloud monitoring shows what is happening inside a system.
Teams use logs, metrics, traces, alerts, and dashboards to answer basic questions:
- Is the application working?
- Which users are affected?
- What changed?
- Which service failed?
- How quickly can we recover?
- Is cloud usage growing?
- Are costs rising faster than traffic?
Code & Pepper’s DevOps engineers for FinTech and HealthTech build monitoring, infrastructure as code, delivery pipelines, security controls, and incident processes around cloud products.
What are the main cloud service models?
The three main cloud service models are Infrastructure as a Service, Platform as a Service, and Software as a Service.
They differ in how much the provider manages and how much responsibility stays with the customer.
| Model | What the provider supplies | What the customer manages |
| IaaS | Servers, storage, networking, virtualisation | Operating system, applications, data, security settings |
| PaaS | Infrastructure, operating environment, development platform | Application code, product data, user access |
| SaaS | Complete application and supporting infrastructure | Users, settings, data use, business processes |
What is Infrastructure as a Service?
Infrastructure as a Service, or IaaS, gives companies access to basic computing resources.
These include virtual machines, networks, storage, and load balancers. The cloud provider manages the physical hardware. The customer manages the operating system, application, and most software settings.
IaaS gives engineering teams a high level of control.
It suits:
- custom application infrastructure
- legacy system migration
- specialist network setups
- workloads that need operating system control
- companies with experienced infrastructure teams
The tradeoff is management effort. The team still needs to patch systems, set permissions, monitor performance, and plan recovery.
What is Platform as a Service?
Platform as a Service, or PaaS, gives developers an environment for building and running applications.
The provider manages more of the underlying infrastructure. Developers focus on code, application configuration, and data.
PaaS can reduce setup time. It suits teams that want to release software without managing each server.
Examples include managed application platforms, database platforms, and cloud development environments.
The tradeoff is control. A managed platform may set limits around runtime versions, scaling, networking, or deployment behaviour.
What is Software as a Service?
Software as a Service, or SaaS, delivers a complete application over the internet.
Users open the product through a browser or app. The provider runs the software, infrastructure, updates, and core security systems.
Common SaaS categories include:
- accounting
- customer relationship management
- project management
- analytics
- scheduling
- file sharing
Code & Pepper builds subscription products through its SaaS product development services, including platforms with user accounts, billing, integrations, cloud infrastructure, and admin tools.
What is serverless computing?
Serverless computing lets teams run code without managing individual servers.
The name can be misleading. Servers still exist. The cloud provider manages them and allocates resources when the code runs.
Teams often use serverless functions for:
- API requests
- file processing
- scheduled jobs
- notifications
- data transformations
- event handling
- integration workflows
Serverless can reduce operational work and support automatic scaling. It can also create issues around cold starts, local testing, provider limits, and cost visibility.
It works best when the architecture fits the workload.
Code & Pepper used an AWS serverless architecture for CoverTree’s InsurTech platform, with services including AWS CDK, AppSync, Cognito, DynamoDB, and Amplify.
What are the main cloud deployment models?
The main cloud deployment models are public cloud, private cloud, hybrid cloud, and multicloud.
Public cloud
A public cloud is operated by a third-party provider.
Companies share the provider’s physical infrastructure, while accounts and resources remain logically separated.
The main public cloud providers include:
- Amazon Web Services
- Microsoft Azure
- Google Cloud
Public cloud services suit startups and scaleups because teams can create resources quickly and avoid buying data centre hardware.
Private cloud
A private cloud is used by one organisation.
It may run in the company’s own data centre or on infrastructure managed by another provider.
A private cloud gives the organisation more direct control over hardware, networks, and data location. It also requires more maintenance, staff, and capital.
Private cloud can fit workloads with strict technical, legal, or operational requirements. It is not automatically more secure. Security depends on architecture, configuration, monitoring, and day-to-day operations.
Hybrid cloud
A hybrid cloud connects public cloud services with private infrastructure or on-premises systems.
A company may keep some data in a private environment while using public cloud services for application workloads, analytics, backups, or temporary capacity.
Hybrid cloud often appears during migration. An organisation may not be able to move every system at once.
The challenge is complexity. Teams need consistent identity, networking, monitoring, data rules, and security controls across both environments.
Multicloud
Multicloud means using services from more than one cloud provider.
A company may use AWS for its main application, Google Cloud for data analysis, and Microsoft Azure for identity or internal systems.
This can reduce dependence on one provider and give teams access to specialist services. It can also increase cost and management work.
Multicloud should solve a clear problem. Using several providers without a reason creates more accounts, policies, tools, bills, and failure paths.
What are the benefits of cloud computing?
Cloud computing can improve delivery speed, scaling, access, recovery, and cost control.
The result depends on how the platform is designed.
Faster product delivery
Cloud services let teams create environments without waiting for physical hardware.
Developers can use managed databases, queues, storage, authentication, monitoring, and deployment services. This shortens the path from product idea to working software.
The speed comes from access to existing building blocks.
A team still needs good architecture and testing. The cloud removes setup work. It does not remove engineering work.
Flexible scaling
Cloud platforms let systems add or remove capacity based on demand.
This helps products handle:
- customer growth
- traffic peaks
- marketing campaigns
- batch processing
- seasonal demand
- data workloads
Scaling is not fully automatic. The application, database, queues, and third-party integrations must also support the load.
A slow database will stay slow after more servers are added.
Lower upfront infrastructure cost
Cloud computing reduces the need to buy data centre equipment before a product has users.
A startup can rent resources and grow its infrastructure as the business grows.
This changes capital spending into operating spending. It can protect early cash, but it does not mean the cloud is always cheaper.
Poor architecture, idle resources, oversized databases, unused storage, and untracked data transfer can create large bills.
Code & Pepper’s cloud cost optimisation guide explains how rightsizing, autoscaling, tagging, storage rules, and clear ownership reduce wasted spend.
Access to managed services
Cloud providers offer managed databases, message queues, security tools, analytics platforms, AI services, and developer tools.
These services can save time. The provider handles parts of patching, availability, backups, and scaling.
The tradeoff is dependence. The team needs to understand pricing, limits, export options, and the cost of moving away later.
Better recovery options
Cloud platforms provide tools for backups, replication, multiple locations, and automated recovery.
These features help teams build systems that recover from failure.
They do not create resilience by default.
A backup that nobody tests may fail during a real incident. A system deployed across several locations may still depend on one shared database. A recovery plan that exists only in a document will not help the on-call engineer.
Recovery needs testing.
Global reach
Cloud providers operate infrastructure across many regions.
A company can place applications or data closer to users. This can reduce delay and support data residency needs.
Global deployment adds choices around:
- region selection
- data transfers
- backups
- user routing
- legal requirements
- operational support
More regions can improve resilience. They also create more systems to manage.
What are the risks of cloud computing?
The main risks are weak configuration, uncontrolled cost, provider dependence, outages, unclear data location, and poor access control.
The cloud is not insecure by default. It is also not secure by default.
Misconfiguration
Many cloud security problems start with a bad setting.
Examples include:
- public storage buckets
- broad admin permissions
- exposed databases
- unused access keys
- missing encryption
- open network ports
- secrets stored in source code
Automation helps. Infrastructure as code lets teams review cloud changes through the same process used for application code.
Code & Pepper’s DevOps best practices cover infrastructure as code, automated testing, monitoring, security checks, and shared ownership.
Uncontrolled spending
Cloud bills can grow faster than product usage.
Common causes include:
- idle test environments
- oversized virtual machines
- unused disks
- long log retention
- expensive data transfer
- weak resource tagging
- duplicated services
- databases sized for rare peaks
- AI workloads without limits
Cloud cost needs an owner.
Code & Pepper provides cloud cost optimisation and cloud migration for teams that need to reduce waste without cutting performance, security, or compliance controls.
Vendor lock-in
Vendor lock-in happens when moving to another provider becomes costly or slow.
The risk grows when a product depends on many provider-specific services.
Lock-in is not always bad. A managed cloud service may save months of engineering work. The decision should be deliberate.
Teams should ask:
- How much time does this service save?
- Can we export the data?
- What would migration require?
- Is the provider-specific feature central to the product?
- Is avoiding lock-in worth extra development cost now?
Portability has a price too.
Outages
Cloud providers can fail.
Applications need plans for service outages, region problems, network failure, database failure, and third-party API downtime.
The right response depends on the product.
A content app may accept several minutes of downtime. A payment platform may need automatic failover, queued requests, clear status handling, and tested incident procedures.
Skills gaps
Cloud platforms make it easy to create infrastructure. They do not make it easy to design it well.
A team needs people who understand:
- architecture
- networking
- security
- data
- DevOps
- cost
- monitoring
- recovery
- compliance
Code & Pepper’s software team augmentation can add cloud architects, DevOps engineers, backend developers, and QA specialists to an existing product team.
Is cloud computing secure?
Cloud computing can support strong security, but the customer still owns critical controls.
Cloud providers protect physical data centres, core networks, and managed platform services. Product teams control how users access the application, where secrets are stored, which systems can communicate, and how data is handled.
A sound cloud security setup includes:
- least-privilege access
- multi-factor authentication
- encryption
- private networks
- secret management
- audit logs
- dependency scanning
- infrastructure scanning
- backup testing
- incident response
- regular access reviews
- monitoring and alerts
Regulated products need another layer.
A FinTech or HealthTech team may also need to prove who accessed data, who changed infrastructure, which checks ran before release, and how the team responded to an incident.
The cloud can provide the evidence. The engineering team must configure and retain it.
What is cloud-native development?
Cloud-native development means building software around the strengths of cloud platforms.
Cloud-native applications often use:
- containers
- microservices
- serverless functions
- managed databases
- automated deployment
- infrastructure as code
- event-driven systems
- observability
- automatic scaling
The goal is not to use every cloud service.
The goal is to build software that can be released, scaled, monitored, and recovered without relying on manual server work.
A modular monolith may be a better starting point than microservices for a small team. Serverless may fit event-driven workloads but not a long-running process. Kubernetes may help a large platform and bury a small startup in maintenance.
Cloud-native architecture still needs restraint.
What is cloud migration?
Cloud migration is the process of moving applications, data, or infrastructure into a cloud environment.
A company may migrate from:
- physical servers
- a private data centre
- another cloud provider
- an old hosting platform
- a monolithic application
- unsupported infrastructure
A migration can follow several paths:
| Strategy | What it means |
| Rehost | Move the system with few changes |
| Replatform | Move it and replace some infrastructure parts |
| Refactor | Redesign the application for cloud services |
| Repurchase | Replace the system with a SaaS product |
| Retain | Keep part of the system where it is |
| Retire | Remove systems the company no longer needs |
The right choice depends on risk, time, budget, technical debt, and business need.
A full rewrite is not always the answer. A direct move may save time but keep old limits. Refactoring can improve scaling and reliability but adds delivery risk.
Code & Pepper’s cloud migration and cost optimisation service starts with assessment and planning, then covers migration, security, performance, and post-migration cost control.
How much does cloud computing cost?
Cloud computing cost depends on usage, architecture, provider, location, data transfer, support, and service choice.
There is no single monthly price.
A cloud bill may include:
- compute time
- database capacity
- storage
- data transfer
- API requests
- monitoring
- backups
- support plans
- security services
- managed platform fees
A small product can run cheaply. A poorly managed small product can also waste money.
The key cost levers are:
- rightsizing
- autoscaling
- reserved capacity
- storage policies
- scheduled shutdowns
- database tuning
- data transfer design
- resource tagging
- budget alerts
- cost ownership
Teams should track cost against a useful product unit.
That might be:
- cost per customer
- cost per transaction
- cost per claim
- cost per appointment
- cost per API request
- cost per AI task
A falling cloud bill is not always good. The team may have cut monitoring, backups, resilience, or security. Cost work needs business context.
Code & Pepper’s guide to cloud cost management covers ownership, budgeting, forecasting, FinOps, and cost controls across AWS, Azure, and Google Cloud.
What is cloud computing in FinTech?
Cloud computing gives FinTech teams access to infrastructure for payments, banking, insurance, lending, investments, analytics, and financial data products.
Common FinTech cloud workloads include:
- payment APIs
- digital wallets
- transaction processing
- Open Banking integrations
- fraud analysis
- KYC workflows
- financial dashboards
- reporting
- document storage
- card services
- insurance platforms
- event processing
The hard part is not creating a server.
It is designing clear boundaries around money, identity, data, access, and provider failure.
A payment provider may send the same webhook twice. A bank API may time out. A transaction may move through several states. A support user may need to investigate a problem without seeing every customer field.
Cloud architecture needs to support those realities.
Code & Pepper’s FinTech software development services connect cloud infrastructure with product design, backend engineering, API integrations, QA, and DevOps.
What is cloud computing in HealthTech?
Cloud computing gives HealthTech teams infrastructure for patient portals, clinical workflows, scheduling, remote care, analytics, messaging, and healthcare integrations.
Common HealthTech cloud workloads include:
- patient data storage
- clinician dashboards
- appointment systems
- secure messaging
- notification services
- document processing
- medical coding tools
- reporting
- insurance checks
- healthcare APIs
- data pipelines
- AI-assisted workflows
HealthTech cloud design needs clear access rules.
A patient, clinician, support worker, administrator, and insurance partner should not see the same data. The system needs logs, role-based access, secure storage, backups, and tested recovery.
Code & Pepper’s HealthTech software development services support healthcare companies that need cloud engineering, product delivery, secure data handling, and team augmentation.
What is cloud computing in InsurTech?
Cloud computing supports digital insurance products with variable traffic, complex integrations, and large sets of business rules.
Common InsurTech cloud workloads include:
- quote engines
- claims workflows
- policy management
- document storage
- payment processing
- underwriting tools
- risk data
- customer portals
- broker platforms
- analytics
Code & Pepper built CoverTree’s insurance platform using AWS serverless services. The architecture supported web and mobile product delivery, external integrations, user identity, data storage, and infrastructure managed through code.
That project shows the value of the cloud in a real product. The cloud gave the team building blocks. The engineering decisions made those blocks work as one insurance platform.
AWS vs Azure vs Google Cloud
AWS, Microsoft Azure, and Google Cloud all provide compute, storage, databases, networking, security, analytics, and AI services.
The best choice depends on the product and the company.
| Provider | Common strengths |
| AWS | Wide service range, mature serverless services, large partner ecosystem |
| Microsoft Azure | Strong Microsoft integration, enterprise identity, hybrid environments |
| Google Cloud | Data analytics, machine learning, Kubernetes, developer tooling |
Do not choose a cloud provider from a feature checklist alone.
Check:
- your team’s skills
- service availability by region
- pricing
- data residency
- support
- existing contracts
- identity systems
- integration needs
- exit cost
- compliance needs
Code & Pepper provides AWS consulting services and also works with Azure and Google Cloud across software, DevOps, data, and AI projects.
When should a company move to the cloud?
A company should consider cloud migration when its current infrastructure limits product delivery, scaling, recovery, or access to managed services.
Common signs include:
- servers take too long to provision
- releases depend on manual infrastructure work
- traffic is hard to predict
- hardware needs replacement
- disaster recovery is weak
- teams need managed data or AI services
- the company is expanding into new regions
- development environments are inconsistent
- infrastructure knowledge sits with one person
- the current hosting model cannot support the roadmap
Moving to the cloud is not a strategy by itself.
The team needs a reason, a target architecture, a migration path, a cost model, security rules, and a recovery plan.
A bad system moved to the cloud is still a bad system. It may become a more expensive one.
How do you choose a cloud computing partner?
Choose a cloud partner based on architecture judgment, product experience, security habits, and cost ownership.
Ask potential partners:
- Which cloud migrations have you completed?
- Why did you choose those architectures?
- How do you control cloud cost?
- How do you handle infrastructure as code?
- How do you design access and secrets?
- How do you test backups and recovery?
- How do you monitor production?
- How do you reduce provider lock-in?
- How do you support audits?
- What happens after migration?
Avoid partners who start with a list of cloud services.
A good partner starts with the workload, users, risks, team, and business model.
How Code & Pepper helps with cloud computing
Code & Pepper helps FinTech, HealthTech, InsurTech, AI, and SaaS companies build, migrate, and improve cloud products.
The team supports:
- cloud architecture
- cloud-native development
- AWS consulting
- Azure and Google Cloud delivery
- cloud migration
- cloud cost optimisation
- serverless architecture
- containers and Kubernetes
- infrastructure as code
- CI/CD
- monitoring and observability
- security controls
- incident response
- backend development
- data engineering
- AI infrastructure
- team augmentation
Code & Pepper has delivered more than 500 software projects since 2006. Its portfolio includes financial products, healthcare platforms, insurance software, payments, analytics, and cloud-based digital products.
You can review examples on the Code & Pepper clients page and in its software development case studies.
Cloud services are easy to start.
The harder work is choosing the right services, setting clear boundaries, tracking cost, protecting data, and building a system the team can operate under pressure.
That is where cloud engineering earns its place.
Final thoughts
Cloud computing gives companies on-demand access to servers, storage, databases, software, and development platforms through the internet.
It can reduce setup time, support growth, and give teams access to services they would struggle to build alone.
It can also create high bills, security gaps, provider dependence, and operational complexity.
The cloud does not fix architecture.
It makes architecture easier to change, faster to deploy, and more visible when it fails.
The best cloud setup is not the one with the most services. It is the one that fits the product, protects its data, supports its users, and gives the engineering team control.
FAQ
What is cloud computing?
Cloud computing is the delivery of computing resources over the internet. These resources can include servers, storage, databases, networking, software, analytics, and development platforms.
How does cloud computing work?
Cloud providers run physical data centres and divide their resources into services that customers can request online. Customers manage these services through web dashboards, APIs, command-line tools, and infrastructure as code.
What are the three main types of cloud services?
The three main cloud service models are Infrastructure as a Service, Platform as a Service, and Software as a Service. IaaS provides basic infrastructure. PaaS provides an application platform. SaaS provides a complete application.
What are public, private, and hybrid clouds?
A public cloud is managed by a third-party provider. A private cloud is used by one organisation. A hybrid cloud connects public cloud services with private or on-premises infrastructure.
What is an example of cloud computing?
Examples include web-based email, file storage, streaming platforms, online accounting tools, customer management software, banking apps, and patient portals. These services use remote infrastructure accessed through the internet.
What are the benefits of cloud computing?
The main benefits include faster setup, flexible scaling, lower upfront hardware costs, access to managed services, global reach, and more options for backup and recovery.
What are the disadvantages of cloud computing?
The main disadvantages include cost complexity, provider dependence, configuration risk, internet reliance, skills gaps, outages, and less direct control over physical infrastructure.
Is cloud computing secure?
Cloud computing can support strong security, but customers still need to manage access, configuration, application code, data, secrets, logs, backups, and incident response.
What is cloud migration?
Cloud migration is the process of moving applications, data, or infrastructure from physical servers, private data centres, or another provider into a cloud platform.
What is serverless computing?
Serverless computing lets teams run code without managing individual servers. The provider allocates resources when the code runs and charges based on usage or execution.
How much does cloud computing cost?
The cost depends on compute, storage, databases, networking, data transfer, monitoring, backups, region, support, and service use. Good cost control requires tagging, budgets, rightsizing, autoscaling, and clear ownership.
Which cloud provider is best?
AWS, Azure, and Google Cloud all support modern software products. The right choice depends on team skills, existing systems, region, pricing, data rules, product needs, and preferred managed services.