What is cloud and how does it work?

What is cloud and how does it work?
Articles and interesting facts

Do you want to make it clear once and for all what the cloud actually is? To help you understand how it works and get to know all the pros and cons, we've written a beginner's guide. Learn everything you need to know about the cloud.

We will introduce you to:

  • what cloud computing is,
  • how the cloud works,
  • what are the main advantages and disadvantages of the cloud,
  • the division into private, public and hybrid cloud,
  • what is SaaS, PaaS and IaaS
  • and what to look out for when choosing and implementing a cloud.

What is cloud computing?

Cloud services are a way of delivering and using information technology over the Internet. Computing resources and your data reside on remote servers that are accessible via an internet connection.

Users can use these services without needing their own physical servers or other hardware or software. This brings many benefits such as reduced IT infrastructure costs, greater flexibility or scalability.


How does the cloud work?

The cloud is a network of interconnected remote servers used to store and share data or use applications and computing power. In other words, the data or applications are on the provider's servers and you access them through the cloud, not physically on a disk on your computer. So it seems like they are floating around in a cloud somewhere - hence the cloud.

Most of you probably use cloud storage for private purposes in this way. But the cloud is so much more than just a repository for your photos, and it's becoming an integral part of corporate IT. You can run your accounting through it, use programs like Microsoft 365, virtualize servers, and much more.

The provider owns its own data center, in which it has a huge number of servers whose capacity and computing power it leases to various clients. It is responsible for the physical and cyber security of your data and the applications you use and their continuous availability.


What are the benefits of the cloud?

Cloud services have a number of advantages and disadvantages, which we will summarize. Let's start with the more positive ones.

Payment and scalability

There is usually a flat monthly (or sometimes annual) fee for using cloud services. This means you can discontinue or increase your use of the service at any time, without having to buy hardware or software that might be useless over time. This is a huge advantage for companies that don't have the budget to set up their own IT department and server room, or for companies that are growing dynamically and need to increase server capacity quickly.


This refers not only to the ease of adapting cloud services to your needs and budget, but more importantly to their use. By not having data or programs physically on your device, but accessing it remotely, it doesn't matter what device you do it through. So you can access your data from your phone while sitting on the train, for example. In short, from anywhere, from anything, at any time. Especially with the trend towards working from home or using freelancers, the cloud is an invaluable tool.

At Algotech, we use NextCloud, which allows you to access your data from any device where it is installed.

Reduce costs

By not having to purchase your own hardware (other than the regular computers your employees work on) or software, you will significantly reduce your initial costs and save on operations and maintenance in the long run. To manage IT you need a team of staff to look after it, but in the case of the cloud, these duties are passed on to the provider and you theoretically don't need to employ even one IT person.


This also applies to data security. Backing up to the cloud is so highly recommended precisely because of its high level of security. A provider that owns a data center has an army of specialists whose job is perfect cyber security. The level of security that these services achieve, you would probably never achieve on your own (without it making economic sense). A cloud service provider's prestige is built on security, so it's in their best interest to make sure nothing happens to your data, or they may "close up shop".

Your data is backed up in multiple places in multiple copies, so it's a safe bet that you won't lose it.

Automatic updates

When you use cloud services to rent apps, you can always be sure you're working with the latest version. This is also important from a security point of view (updates remove potential vulnerabilities) and, of course, from a practicality point of view. You don't have to think about updates, they happen automatically. So there's no risk of an employee endlessly putting them off.


What are the disadvantages of the cloud?

There are two sides to every coin. And that's the case with the cloud. The advantages outweigh the advantages for us, but you should definitely be aware of the potential disadvantages as well.

Internet dependency

The availability of cloud services depends on an internet connection - the data and applications aren't on your computer, so you can't work with them offline. Therefore, they may not be ideal for you if you're based in an area where quality connectivity is more difficult. But in large and medium-sized cities, you certainly don't have to worry. In short, evaluate how often your internet goes down and determine if the cloud is right for you.

Distrust about security

Many businesses are uncomfortable with having data stored offsite. Even though they know their security is high, they are left with the nagging feeling that they don't have everything completely under control. In this case, you might consider a hybrid solution, which we'll get to in a moment.

Given the volatile geopolitical situation, we also recommend storing data with domestic providers where you know that the data is not on the other side of the world, but a short distance away. In addition, you can easily communicate with the provider and support in Czech, which makes working with the cloud more pleasant. For example, we have a data centre in three locations near Prague.


The division of the cloud: public, private and hybrid

Public cloud

The public cloud is accessible by a third party to the general public via the internet. This type of cloud is the most widely used and includes well-known services such as Microsoft Azure, Amazon Web Services (AWS) or our AlgotechCloud. Customers only pay for the services they actually use, which is great for smaller businesses or companies with fluctuating computing capacity requirements.

When you use a public cloud, you eliminate the management and hardware acquisition costs of an on-premise solution.

Private cloud

Above, we talked primarily about the cloud that your provider sets up for you. But that doesn't mean you can't set it up yourself. In that case, you can get a private cloud that you run and manage within your company. This will give you more control over your data and security, which can be an advantage (at least psychologically) for some businesses. You can build a private cloud completely on your own, but then expect high hardware costs and long-term management and security of the cloud.

Or you can physically rent it from the provider in the data centre. The hardware won't be yours, but you'll have full control over the management of the cloud.

Hybrid cloud

As the name suggests, a hybrid cloud combines elements of private and public clouds. It's suitable for organisations that want to keep some sensitive data and operations in the private cloud while taking advantage of the public cloud for other purposes.


The division of cloud services: SaaS, PaaS and IaaS

To make matters worse, cloud services are further subdivided based on what exactly you're renting.

Software as a Service (SaaS)

SaaS is a model where you rent access to applications and other software and log in to them over the internet. You don't have to install or manage any software; you just log into your account and use the service you need. You don't deal with updates, security, or buying licenses. Examples of SaaS include web-based project management applications, email services, or office applications like Microsoft 365.

Platform as a Service (PaaS)

PaaS provides a complete environment for developers. This includes tools for developing, testing and deploying applications without the need to manage infrastructure. PaaS is ideal for developers who want to build applications quickly and easily without complex server configurations.

Infrastructure as a Service (IaaS)

IaaS provides infrastructure such as virtual servers, storage or networks over the Internet. The provider grants you access and you have full control over the operating system and applications that run in the cloud. IaaS is suitable for organizations that want to move their physical servers to the cloud and reduce hardware costs, but don't want to give up management control.


What to look out for when choosing and implementing a cloud

You already know what cloud computing is and which type is best for you. Now what else to look out for when you're choosing and implementing it.

Provider reliability

This probably doesn't need to be stressed, but just to be safe... choose a reputable and reliable cloud provider, not someone who runs a data center in their garage. Thoroughly research customer reviews, where they are based, whether they provide support in Czech and what their security and availability levels are - you want companies with 24/7 support, TIER III or TIER IV availability and ISO 27001 information security certification.

Be clear about what you want

Be clear about what you want to use the cloud for and what services you need. Migrating to the cloud is a big step that you won't want to repeat anytime soon. So talk to your department heads to find out how the cloud can benefit them and which features they would welcome. It makes a difference whether you use the cloud as a place to store your files, or whether you use its massive computing power to run an ERP system, for example.

Calculate that it's worth it for you

Calculate the full cost of cloud services, including charges for using additional services and possible hidden fees. Make sure that your cloud investment is well thought out and that you have chosen the best solution for your needs.

Legal requirements

When moving to the cloud, it is important to consider the legal requirements that apply to your data. Make sure your provider complies with data protection and other relevant regulations.

With GDPR in mind, it's worth choosing a company with a data centre in the European Union, ideally in the Czech Republic.

Migrating to the cloud

When migrating your data and applications to the cloud, plan the entire process carefully and consider the potential risks. Migration can be challenging and complicated, so consult experts (like us) who have experience with similar projects and leave the whole process to them.

Support your employees

Explain to employees why cloud services are important to your business and provide them with the training they need to become more comfortable with the cloud environment. For some, this can be a huge change that they will dread. Support them as much as you can and identify someone they can contact with any questions.

Ongoing optimization

The cloud environment is not static, so it's important to continually optimize and update it to get the best results.



Whether you need a consultation, or outright provisioning of the entire cloud migration, contact us. We run cloud services in our own data centres located in the Czech Republic and offer all cloud solution models as well as professional tailored solutions.

We can help you with the complete transition of your business to the cloud without disrupting the normal running of your business. At the same time, we will increase security and guarantee that you can access your data 99.99% of the time. Contact us, set up an appointment and fly with us to the cloud.

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