Fundamentals of Cloud | Public v Private, SaaS v Hosted, Multitenancy

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No longer a novel technology, cloud is increasingly becoming the mainstay of the modern enterprise IT architecture. Nonetheless, navigating a myriad of cloud-related concepts can still prove challenging.

Should your business opt for public cloud or private cloud? What does it mean if your software is single-tenant / multi-tenant? Are SaaS and hosted software solutions the same?

This article will get you up to speed with the fundamentals of cloud computing.

Fundamental Concept of Cloud Computing

Table of Contents

What is Cloud Computing?

Simply put, cloud computing is the delivery of on-demand computing resources through the internet. These resources include tools and applications like data storage, servers, databases, networking, and software.

Cloud computing offers faster innovation, flexible resources, and economies of scale. As a result of these benefits, cloud computing has become an indispensable part of modern life.

Most of us are using cloud computing applications on a daily basis, even if we are not aware of them. Notable examples include Gmail, Dropbox, Salesforce, HubSpot, Microsoft 365, etc.

Still, there is no denying that cloud computing is quite a generic term, used to refer to many different classifications, types, and architecture models.

Read more: The Cloud: A Storm of Confusion

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Public vs Private vs Hybrid Cloud

Cloud computing can be categorised into three general types:

  • Public cloud is cloud computing that’s delivered via the internet and shared across organisations.
  • Private cloud is cloud computing that is dedicated solely to your organisation.
  • Hybrid cloud is an environment that uses both public and private clouds.

Public Cloud

Public clouds are owned and operated by third-party service providers, which deliver their computing resources, like servers and storage, over the internet. The public cloud offers customers of all sizes extensive choices of solutions and computing resources, as well as low cost and high elasticity. All of which makes public cloud the most popular model of cloud computing services.

Services on the public cloud may be free, freemium, or subscription-based, wherein customers are charged based on the computing resources they consume.

Read more: Cloud-Washed vs. Cloud-Native: What Are They & How to Spot Them?

The services provided by public cloud can range from basic emails, and apps storage, to more demanding tasks such as serving as a large scale infrastructure platform for software development.

With public cloud, the service provider is the one who is responsible for all of the maintenances, management and development of the pool of computing resources used by customers.

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Private Cloud

Contrary to public cloud, private cloud is any cloud computing solution that is used by a single organisation. The organisation that uses private cloud does not share these resources with any other customers. Many use this type of cloud due to its security, exclusivity, flexibility, and efficiency.

Private cloud can be located physically on the company on-site infrastructure, or operated by a third-party service provider. Private cloud can be customised to meet the unique business and security needs of the organisation.

With more visibility and control into the infrastructure, organisations can operate compliance-sensitive IT workloads with high security and performance. However, all of these benefits come with a higher price tag, which is the main reason for its unpopularity.

Read more: Cloud Adoption Strategy: Cloud-First vs. Cloud-Only

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Hybrid Cloud

Hybrid cloud is any system that incorporates both private and public cloud solutions. Organisations that use this type of cloud can use the public cloud for non-essential and non-sensitive data to keep the cost down and use their private cloud for more important and sensitive tasks for optimal security.

As a combination of public cloud and private cloud, hybrid cloud inherits both the positive and negative traits of the two. With a well-integrated system, organisations can expect more security, control, flexibility and reliability from their cloud services.

However, hybrid cloud’s weakness is its added complexity, as well as high cost.

Read more: Cloud 101 – A quick guide to Cloud ERP: Benefits & Drawbacks

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PaaS vs IaaS vs SaaS

The most popular models of cloud computing are PaaS (Platform as a Service), IaaS (Infrastructure as a service), and SaaS (Software as a Service). These models serve different purposes and needs.

Software as a Service (SaaS)

Software as a Service, also known as cloud application services, represents the most widely used option for firms in the cloud service market.

SaaS uses the internet to deliver applications, which are managed by a third-party provider, to its users. Most SaaS applications run directly through your web browser, which means they do not require any downloads or installations on the client-side, which eliminates the need for IT staffs to perform such tasks. Vendors manage all potential technical issues, such as data, middleware, servers, and storage, resulting in a well-maintained, well-supported yet agile IT structure for the business.

The main selling points of SaaS are its simplicity, cost-effectiveness and convenience for the user. With the service provider doing most of the tasks, ranging from maintaining, managing and developing the system, to handling technical issues and customer support, SaaS can help companies redirecting their resources to their core businesses.

However, SaaS has its cons as well. Such as low interoperability, lack of control for the customer, and low customisation.

Read more: How AWS Manages and Maintains Their Massive Data Centres

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Platform as a Service (PaaS)

Cloud platform services, also known as Platform as a Service (PaaS), provide cloud components to certain software while being used mainly for creating applications. In other words, PaaS offers a framework for developers upon which they can build applications.

PaaS deliver their services through the web, much like SaaS. Because all servers, storage, and networking can be managed by the enterprise or a third-party service provider, developers can focus their resources on making software instead of worrying about operating and maintaining of the computing infrastructure.

This kind of cloud service is highly available and, for most of the time, cost-effective.

The pitfalls to PaaS is quite similar to that of SaaS, i.e. potentially low customisation, hard to migrate to other providers, and low operational control for customers.

Read more: SAP vs. Infor – Software Giants Face Off Over Cloud Strategy

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Infrastructure as a Service (IaaS)

Infrastructure as a service (IaaS) is a type of cloud computing service that offers essential compute, storage, and networking resources on demand. IaaS allows customers to operate their businesses with a high level of computing power without the need to invest in hardware, nor managing and developing a physical data centre.

IaaS delivers cloud computing services, including but not limited to servers, network, operating systems, and storage, through virtualisation technology. These cloud servers are typically provided to the company through a dashboard or an API, giving customers total control over the entire infrastructure.

IaaS provides the same technologies and capabilities as a traditional data centre without having to physically maintain or manage it. IaaS clients can still access their servers and storage directly, but it is all outsourced through a “virtual data centre” in the cloud.

Contrary to SaaS and PaaS, IaaS gives customers much more control over the services. In most cases, customers have complete control over the databases. This, however, means that customers are responsible for the OS, middleware, runtime, etc.

With many benefits such as scalability, flexibility, more control for the customers, and cost-effectiveness, IaaS is a very popular option for many firms who want to utilise and control their system without having the cost of purchasing hardware.

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Software as a Service (SaaS) vs Hosted Software

SaaS and Hosted software offer some quite similar benefits, however, they have some key differences, as well as their own pros and cons. To be able to choose the correct option for your needs, is it important to understands the differences between the two, and what they offer.

Software as a service (SaaS), as mentioned above, are applications that are delivered to customers through the web. SaaS software does not require any installation from the end-users, and is provided by the service provider.

This form of cloud service is very popular due to its reliability, low initial costs, and convenience as the service providers do most of the management and maintenance.

However, SaaS has its own drawbacks, such as lack of control and customisation for the customer as well as potential higher long-term cost.

Another approach to deliver the software to end-users through the internet is hosted software. Hosted software, in simple terms, is software that a customer buys and owns, but is installed via a hosting centre instead of on the customer’s servers.

As the customer owns the software, they can choose to update the software whenever fits them most, as well as having more customisations on the product.

On one hand, there are a few disadvantages to hosted software, one of which is that the customers will have to get more involved with the software. Installing, maintaining, and updating the software requires resources, provided either by the customer’s IT personnel or a managed service provider (MSP).

Additionally, because the customer owns the software, they still have to pay a high upfront license fee instead of a much lower monthly rental fee of the SaaS model.

On the other hand, the SaaS’ pay-as-you-go model may result in a higher total cost in the long run. Because the customer rents, rather than own, the software, customisation is limited compared to hosted software.

Read more: How to Adopt Cloud

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Single-tenant vs Multi-tenant

Single-tenancy or multi-tenancy is another crucial consideration in cloud services. What are their pros and cons? And which model should you choose?


A single instance of the software and supporting infrastructure serves a single customer. With single tenancy, each customer has their independent database and instance of the software. Essentially, there is no sharing happening with this option.

Read more: Cloud Vendors – What Do They Have to Offer?

In a single-tenant architecture, the cloud service provider will aid in managing the software instance and dedicated infrastructure while still lending nearly full control to a single tenant for customisation of software and infrastructure. Some common characteristics of single-tenancy models are that they tend to provide a high level of user engagement and user control, as well as reliability, security and backup ability.

Potential benefits of the single-tenant model are high levels of customisation, reliability, and security. However, these benefits result in a higher cost for customers.

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Multi-tenancy means that a single instance of the software and its supporting infrastructure serves multiple customers. Each customer shares the software application and also shares a single database. Each tenant’s data is isolated and remains invisible to other tenants. This type of architecture is very popular in the SaaS environment.

In comparison to single-tenancy, multi-tenancy is cheaper, has efficient resource usage, has a lower maintenance cost and a potentially larger computing capacity. 

Are you considering moving your key business processes to the cloud? Or simply interested in learning more about different types of cloud services and how they can benefit your employees? Share your concerns with us today!

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