Outcome
By the end of this lesson, you will be able to explain what the cloud is in one sentence and say what you are actually paying for when you use it.
| Prerequisites | None |
| Time | 7 minutes |
1. Concept
The cloud is other people’s computers, rented by the hour.
That is the whole idea. The word “cloud” makes it sound like something floating and abstract. It is not. It is a very large building full of ordinary computers, owned by a company such as Amazon, Google or Microsoft. You rent some of those computers over the internet, use them for as long as you need, and pay for the time you used.
A building like that is called a data centre: a warehouse of computers with its own power supply, cooling and security guards. The big cloud companies run many of them around the world.
What changes when you rent
Think about how you get a car. You can buy one: pay a lot up front, then pay for insurance, servicing and parking whether you drive it or not. Or you can rent one: pay nothing up front, pay by the day, and hand it back when you are done.
Computers work the same way.
- Owning means buying machines, finding a room for them, paying for the electricity and hiring people to repair them.
- Renting from the cloud means asking for a machine through a website, getting it within minutes, and paying only while you have it.
The company you rent from is called the cloud provider. The machines and services you rent are called resources. Each resource you rent has a meter running on it, much like a taxi meter.
What you are paying for
Every cloud charge comes from one of a few kinds of meter:
- Time. A rented computer is charged for every hour it is switched on.
- Space. Files you keep are charged for how much room they take up, every month.
- Movement. Data you send out of the cloud is charged by the amount sent.
- Requests. Some services charge a tiny amount each time you ask them to do something.
You will meet all four again in I.2 and I.3. For now, hold on to one point. The meter runs while the resource exists, not while someone is looking at it. A rented computer that nobody uses for a month still costs a month.
Why companies do it
Renting has three big attractions.
- Speed. A new machine takes minutes to get, not the weeks it takes to order, deliver and install hardware.
- No big up-front bill. You pay monthly for what you used, instead of buying years of capacity in advance.
- Size on demand. If your website gets ten times the visitors for one weekend, you can rent ten times the machines for that weekend and hand them back on Monday.
The catch is the flip side of the same coin. Because anyone with access can rent more in minutes, spending can grow in minutes too, without anyone signing a purchase order. That is why cloud cost is a subject worth a whole university.
2. Worked example
A small online shop needs a computer to run its website.
Option 1: buy one. The shop buys a server (a computer built to run all day, every day) for an illustrative $3,000. It also pays for a rack to put it in, power and a support contract. The server sits there whether the shop has ten visitors or ten thousand.
Option 2: rent one. The shop rents a similar machine from a cloud provider at an illustrative $0.10 per hour.
| Hours on | Illustrative rate | Monthly cost | |
|---|---|---|---|
| Rented, on all month | 730 | $0.10 per hour | $73 |
| Rented, on only during business hours (about 220 hours) | 220 | $0.10 per hour | $22 |
(730 is roughly the number of hours in a month: 24 hours times about 30.4 days.)
Two lessons sit in that table. Renting turns a big one-off cost into a small monthly one. And the monthly cost depends on how many hours the machine is left on, which is a choice, not a fixed fact.
These prices are illustrative. Real rates depend on the size of the machine, the provider and the location.
3. Hands-on (5 min: no account needed)
1. Open the AWS EC2 pay-as-you-go price page: aws.amazon.com/ec2/pricing/on-demand (AWS calls the pay-as-you-go price "on-demand".)2. Find any machine size in the table, for example a machine with 2 processors and 8 GB of memory (the table says "2 vCPU" and "8 GiB").3. Note its price per hour.4. Multiply by 730 to get a month left on all the time.5. Multiply by 220 to get a month used only in business hours.You have just done the most important sum in cloud cost: rate times hours. The difference between your two answers is money spent on a machine that was switched on while nobody needed it.
If the page asks you to choose a region, any one will do. You will learn what regions are in L4.
4. Knowledge check
Q1
Which sentence best describes the cloud?
A. Software that lives on your laptop and syncs to the internet
B. Renting computers in a provider’s data centre, paying for use
C. A single giant computer shared by everyone on the internet
D. A type of network cable that connects offices together
Show answer
Correct: B. The cloud is ordinary computers in a provider’s data centres, rented over the internet. A describes one kind of app that uses the cloud, not the cloud itself. C is wrong because it is many separate machines, not one. D confuses the cloud with the network that reaches it.
Q2
A rented cloud computer was switched on all month, but nobody used it. What do you pay?
A. Nothing, because it was never used
B. Half the normal price, because it was idle
C. The full price for every hour it was switched on
D. Only a small parking fee for keeping it reserved
Show answer
Correct: C. The meter runs while the resource is switched on, not while someone is using it. There is no idle discount and no separate parking fee for a machine that is running.
Q3
Which is a real advantage of renting computers from the cloud rather than buying them?
A. You can get machines in minutes and hand them back when done
B. The total cost is always lower than owning, for every company
C. Nobody in the company has to think about cost any more
D. The machines never fail, because the provider guarantees it
Show answer
Correct: A. Speed and the ability to grow and shrink are the core attractions. B is wrong: for steady, predictable workloads owning can be cheaper. C is the opposite of the truth, since spending can now grow without a purchase order. D is wrong because cloud machines fail too; providers design for it, but do not promise it never happens.
5. Apply
Next time someone says “it’s in the cloud”, translate it in your head: “it is running on a computer we rent from a provider, and the meter is on.” Then ask two plain questions. What are we renting? And how many hours is it switched on?
Those two questions are the start of every cloud cost conversation, at any company, on any provider.