Skip to main content
Mobius
Beginner

What is the cloud

Also known as: cloud computing, cloud services, cloud technology

Definition

The cloud, or cloud computing, is renting a provider's servers, storage and software over the internet instead of running your own, paid monthly or by use.

Why it matters

Most small businesses are already in the cloud, because email, shared files and online bookkeeping are cloud services.

Common mistakes

Assuming the provider handles all security, when your data, accounts and settings stay your job.

Related terms

Worked exampleIllustration

A five person bookkeeping office retires its office server

Moved to

  • Email and calendarsSaaS
  • Client filesCloud storage
  • Bookkeeping softwareSaaS
  • Old Windows programIaaS
  • Server in the back room

The provider runs

Buildings and hardware, and for SaaS also the software and its updates.

The office still runs

Users and passwords, removing leavers' access, backups of its own data, and updates on the virtual machine.

Steps

  1. Email and calendars move to a SaaS suite. The provider runs everything, and the office manages users and passwords.

  2. Client files move to cloud storage with two step login, plus a separate backup the office controls.

  3. The bookkeeping software is already SaaS, so nothing moves there.

  4. One old program that runs only on Windows goes to a rented virtual machine (IaaS), where the office's IT person still installs the updates.

  5. The office writes down what stays its job everywhere: who has access, removing a leaving employee, and backups of its own data.

The server room is gone, and the responsibility for access and data stays with the office.

Illustration

Pay for the peak, or pay by use

Example values. Move them to match your business.

The busiest month is 2.5 times an average one. A server of your own costs 30 server months a year and sits idle 60% of the time, paying by use costs 24. With a peak this sharp, paying by use is cheaper, because you stop paying all year for the busiest month.0204060⁨Server months a year⁩⁨1×⁩⁨2×⁩⁨3×⁩⁨4×⁩⁨5×⁩⁨Busiest month against an average month⁩
  • A server of your own, sized for the busiest month
  • Paying by use
  • Both cost the same
  • Paying by use is cheaper here

The example year, month by month

  • What each month uses
  • Kept for the peak, idle: 60% of the year

The busiest month is 2.5 times an average one. A server of your own costs 30 server months a year and sits idle 60% of the time, paying by use costs 24. With a peak this sharp, paying by use is cheaper, because you stop paying all year for the busiest month.

Counted in server months a year, never in shekels. A server of your own has to be big enough for the busiest month and is paid every month. Paying by use costs more for each server month, but only for what the year used. Where the lines cross depends on how far the busiest month is from an ordinary one.

Size one server, or let the cloud follow demand

A server sized for 50% of the busiest day turned customers away on 4 days (12% of the month's demand), and 23% of what you paid for sat idle.Your serverHoliday rushDay 1Day 30
  • Served
  • Turned away
  • Paid for, idle
  • Your server

A server sized for 50% of the busiest day turned customers away on 4 days (12% of the month's demand), and 23% of what you paid for sat idle.

An illustrative month with a holiday rush. Each bar is one day's demand as a share of the busiest day.

Definition

Cloud computing is a model for on demand network access to a shared pool of computing resources, such as servers, storage, networks and applications, that a provider hands out and takes back quickly with little management effort. NIST lists five essential characteristics: on demand self service, broad network access, resource pooling, rapid elasticity and measured service. It names three service models. In IaaS (Infrastructure as a Service) you rent processing, storage and networks and run any software, including the operating system. In PaaS (Platform as a Service) you deploy your own application on the provider's platform without managing the servers. In SaaS (Software as a Service) you use the provider's application through a browser or an app and manage only your own settings. It also names four deployment models: public, private, community and hybrid. A serverless service still runs on servers, the provider only manages them for you.

Why it matters

The practical gain is no hardware to buy up front and capacity that grows or shrinks with use, while the monthly bill grows with use too. Security is shared: AWS describes security and compliance as a shared responsibility, where the provider secures the cloud itself and the customer secures what it puts in it, its data, accounts and settings. The cloud also does not bring back data you deleted or overwrote, so backup stays your job. Location matters when a client or a regulator asks where data sits: AWS opened its Israel (Tel Aviv) Region on 1 August 2023, and Microsoft Azure and Google Cloud also run regions in Israel.

Directly related: SaaS, Server, Hosting.

Improvement tips

  • Turn on two step login for every cloud account, starting with the admin accounts.
  • Set a budget alert, so a bill that follows use cannot surprise you.
  • Keep a backup of your key data outside the service that holds it, and test a restore.
  • Keep a list of who has access to what, and remove a leaving employee from every service on the last day.

Common mistakes

  • Leaving a storage folder or a database open to the public through a wrong setting.
  • Treating the cloud as a backup, when a file you delete or overwrite in the cloud has no other copy.
  • Leaving unused virtual servers running, so the bill keeps growing for nothing.

Related terms

TechnologyBeginner

SaaS

SaaS (Software as a Service) is software you rent by subscription and use in a browser or an app, with nothing to install. The vendor hosts and updates it.

TechnologyBeginner

Server

A server is a computer, or a program on one, that receives requests from other programs, such as a visitor's browser, processes them and sends back an answer.

TechnologyBeginner

Hosting

Hosting is a service that rents you space on a server connected to the internet all the time, so your website is available to every visitor.

TechnologyBeginner

Database

A database is an organised collection of information, usually tables of rows and columns, that software can search, update and link, like customers to orders.

Quick check

In the cloud, which part of security stays with you?

Choose an answer

Frequently asked questions

Do I need to understand the cloud before I start my business?
Not the technology, but the idea: you rent computing instead of buying it. Your email, shared files and bookkeeping will almost certainly run in the cloud from day one, so the decisions that matter are who holds the admin account, how people log in and where the backups live.
When does the cloud first become relevant for a new business?
On the day you open a business email account or a shared drive, because both are cloud services. A custom app or an online store adds a second layer later: the servers or the platform it runs on.
What does moving to the cloud cost up front?
Usually there is no hardware to buy. Instead you get a monthly bill, per user for software you log into, or by use for servers and storage, and it grows as the business uses more. Compare a year of that bill with what your own equipment and its upkeep would cost.
Should a small business use public cloud or a private cloud?
Public cloud is the usual choice for a small business: you share the provider's infrastructure and pay for your part. A private cloud, run for one organisation only, fits strict regulatory or technical needs. Either way, security is split between the provider and you.
Why does the cloud matter for a business already running?
It lets you add capacity for a busy season and release it afterwards, and it lets the team work from anywhere. It also takes hardware failures off your desk. The trade off is a bill that follows use and a dependence on the provider's service.
What goes wrong when a business ignores cloud security?
The usual failures are simple: a storage folder or database left open to the public, a shared admin password, an employee who left and still has access. The provider cannot fix these for you, because they sit on your side of the shared responsibility.
How do I control rising cloud costs?
Set a budget alert, read the bill line by line every month, switch off servers nobody uses and remove users who left. Many providers discount a longer commitment, which makes sense only for use you are sure will continue.
How do I move my office data to the cloud safely?
In stages. Start with email and files, check that everything arrived, keep the old copy until you have tested a restore from the new place, and switch off the old server last. Set up two step login before the move, not after it.
What does cloud actually mean in plain words?
Computing you rent from someone else, over the internet. The files and programs sit on the provider's servers in data centres, and you reach them from any device.
Is the cloud safe for private customer data?
It can be safer than an office computer, because large providers invest more in physical and network security than a small office can. The weak points are usually on your side: passwords, access rights and settings. Turn on two step login and review who can see what.
Do I need a cloud engineer to use the cloud?
Not for everyday tools like email, shared drives or online bookkeeping. You need a developer or an IT person when you run your own software on rented servers, because someone has to update and secure those servers.
What happens to my cloud files if my internet goes down?
You cannot reach files stored only in the cloud until the connection returns, although many tools keep offline copies that sync later. The files stay on the provider's servers, and a separate backup protects you when the problem is on the provider's side.

Sources: Peter Mell and Timothy Grance, The NIST Definition of Cloud Computing, NIST Special Publication 800-145, September 2011, Amazon Web Services, Shared Responsibility Model (aws.amazon.com/compliance/shared-responsibility-model), read 23 September 2026, AWS News Blog, Now Open: AWS Israel (Tel Aviv) Region, 1 August 2023 (aws.amazon.com/blogs/aws), read 23 September 2026

Last reviewed: 2026-09-23

I have worked with

What Clients Say

From different fields, at different stages of business

Dan Manto

Eclipse Capital

Real Estate Investment and Finance, USA

Arty McLabin

GameReady

Game Development Education and Outsourcing, International

Anna, Beautician

Anna

Beautician

After I finished a cosmetology course at a leading company, I was confused. I didn't know how to open a business, what to sell from home, or how to bring in clients. Since I reached out to Mobius, everything has changed. We built an organized plan with clear steps and no unnecessary risks. Today I see results, and I'm growing and developing every month.

Mark, Massage therapist, Gan Yavne

Mark

Massage therapist, Gan Yavne

When I finished a massage course, I imagined a different world. I found out it's a hard field, and financial stability isn't easy to find. When I came to Mobius, something changed. We started an organized process and built a business plan. Without Mobius? I probably would have given up. Today I believe in myself and in my own path.

Tech decisions bigger than your team?

Alex helps Israeli businesses choose technology that fits the business, not the hype. The first call is free.

+972 055-248-6151. Better on WhatsApp: I am in meetings most of the day and answer as soon as I am free.