Cloud services are IT resources, such as computing power, storage, databases, platforms and ready-made software, that a provider hosts and manages and that you use over the internet, paying for what you consume. Instead of buying and running your own servers, you rent capacity and capabilities on demand and scale them up or down as the business needs change.
This guide explains the three service models (IaaS, PaaS and SaaS), the deployment models, the benefits that hold up in practice, how cloud costs work, what GDPR and EU data residency mean for your choice of provider, how the three largest public clouds compare, and when keeping workloads on your own infrastructure is still the better decision.
TL;DR / Key Takeaways
- Cloud services come in three service models: IaaS (you rent infrastructure), PaaS (you rent a platform to run your code) and SaaS (you use finished software).
- Public, private and hybrid clouds differ in who owns the infrastructure and how much control and isolation you get.
- The main benefits are lower upfront investment, fast scaling, access from anywhere and provider-grade reliability, but only if the architecture and the bill are actively managed.
- Security in the cloud is shared: the provider secures the infrastructure, you remain responsible for your data, identities and configuration.
- For European companies, the choice of region, the EU-US Data Privacy Framework and the EU Data Act's switching rules matter as much as price.
What are cloud services?
Cloud services are IT resources delivered over the internet by a provider that hosts and manages the underlying infrastructure. They range from raw compute and storage to complete applications. You access them on demand, pay for what you use, and avoid buying, installing and maintaining the hardware and software yourself.
The reference definition comes from the US National Institute of Standards and Technology (NIST SP 800-145). It describes cloud computing as on-demand network access to a shared pool of configurable resources that can be provisioned and released with minimal management effort, built on five essential characteristics, three service models and four deployment models.
In practice, "cloud services" covers anything from cloud storage and virtual servers to software as a service (SaaS) and platform as a service (PaaS). The key shift is from owning IT assets to consuming them as a service, which is why cloud suits businesses that need to scale resources quickly.
What is the difference between IaaS, PaaS and SaaS?
The three models differ in how much of the stack the provider runs for you. With IaaS you rent servers, storage and networks and manage everything above them. With PaaS the provider also runs the operating system and runtime, so you only deploy code. With SaaS you simply use finished software through a browser or app.
| Model | What you get | What you still manage | Typical examples | Best fit |
|---|---|---|---|---|
| IaaS (Infrastructure as a Service) | Virtual machines, storage, networks | Operating system, middleware, runtime, applications, data | Amazon EC2, Azure Virtual Machines, Google Compute Engine | Teams that need full control or are moving existing servers as they are |
| PaaS (Platform as a Service) | A managed platform to build, run and scale applications | Your application code and data | AWS Elastic Beanstalk, Azure App Service, Google App Engine | Product teams that want to ship code without running servers |
| SaaS (Software as a Service) | A complete application, ready to use | Users, settings and your data | Email, CRM, collaboration and accounting software | Standard business functions where you do not need custom software |
Most companies use all three at once. A typical mid-sized business runs its email and CRM as SaaS, hosts its own customer-facing application on PaaS or managed containers, and keeps a few legacy systems on IaaS virtual machines until they can be modernised.
What are the cloud deployment models?
A deployment model describes who owns the infrastructure and who can use it. A public cloud is shared by many customers of a third-party provider, a private cloud is dedicated to one organisation, and a hybrid cloud combines the two. NIST also defines a community cloud, shared by organisations with common requirements.
Public cloud services are provided by third parties and accessible over the internet. They are usually the most affordable option and suit businesses that need resources on demand, because capacity is shared and billed by use.
Private cloud infrastructure is hosted and managed for a single organisation, either in its own data centre or by a provider. It costs more than public cloud but gives greater control and isolation over resources, which matters for some regulated workloads.
Hybrid cloud combines public and private resources so that each workload runs where it fits best. It is a flexible option for businesses with variable demand or with systems that cannot move yet. Many organisations also go multi-cloud, using more than one public provider, usually for specific services rather than by design.
What are the real benefits of cloud services for a business?
The benefits that hold up in practice are four: lower upfront investment, fast scaling, access from anywhere and provider-grade reliability. Each one depends on how the environment is designed and run. A cloud estate copied from old servers without changes often keeps the old problems and adds a monthly bill.
Lower upfront cost. You no longer buy servers and licences ahead of demand; you pay for resources as you use them. You also avoid much of the cost of maintaining and upgrading hardware, although you take on the cost of managing the cloud environment itself.
Scalability. Capacity can be increased or reduced in minutes, without procurement cycles or hardware upgrades. This is most valuable for seasonal traffic, new product launches and workloads that run only part of the time.
Flexibility. Resources are reachable from anywhere, at any time, which makes remote work and distributed teams easier to support. Teams can also try a new database or service without a hardware purchase.
Reliability and security. Major providers offer multiple data centres per region, built-in backup and disaster-recovery options, and security tooling that few mid-sized companies could build alone. Under the AWS shared responsibility model, the provider secures the cloud itself, while you remain responsible for security in the cloud: your data, identities, access rules and configuration.
How much do cloud services cost, and what is FinOps?
Cloud services are billed by consumption: compute time, storage volume, data transfer out of the provider's network and managed services. Costs are predictable only when usage is measured and owned. FinOps is the discipline that gives engineering, finance and business teams shared responsibility for that spend and for the value it creates.
The cost model rewards some habits and punishes others. Resources left running overnight, oversized virtual machines, unattached storage and heavy data transfer between regions are the usual sources of surprise bills. Commitment discounts, autoscaling and switching off non-production environments outside working hours are the usual fixes.
The FinOps Foundation defines FinOps as an operational framework and cultural practice that maximises the business value of cloud and technology, enables timely data-driven decisions and creates financial accountability through collaboration between engineering, finance and business teams. WWG's FinOps optimisation service applies this approach, starting from an assessment of your actual cloud spend before any change is proposed.
How do GDPR and EU data residency affect your cloud choice?
GDPR does not forbid the cloud, but it makes you accountable for where personal data is stored and who can access it. European companies should choose EU regions, check which provider entities process the data, and verify the legal basis for any transfer outside the EU before signing.
All three major providers offer data centre regions inside the EU, so storing data in Europe is a configuration choice rather than a limitation. Support, monitoring and some global services may still involve processing outside the EU, which is why the data processing agreement and the list of sub-processors matter as much as the region selector.
For transfers to the United States, the European Commission adopted its adequacy decision for the EU-US Data Privacy Framework on 10 July 2023, allowing personal data to flow to US companies that participate in the framework. Check that your provider is certified and keep that evidence in your records.
The EU Data Act has applied since 12 September 2025. Among other things, it sets rules that make it easier for customers to switch between cloud and other data-processing providers, which reduces lock-in risk and is worth reflecting in your contracts and architecture.
How do AWS, Microsoft Azure and Google Cloud compare?
The three largest public clouds offer comparable core services: virtual machines, object storage, managed databases, Kubernetes, serverless functions and AI tooling. The practical differences lie in ecosystem fit, existing licences, the skills your team already has, and the specific managed services a workload needs, rather than in raw capabilities.
Amazon Web Services (AWS) has the broadest catalogue of managed services and a large ecosystem of tools and practitioners. It is a common default for cloud-native products and startups. If you run on AWS without an in-house operations team, a managed AWS servers service hands day-to-day provisioning, patching, monitoring and cost control to an external team.
Microsoft Azure fits naturally where a company already runs Microsoft 365, Active Directory (now Entra ID), Windows Server or SQL Server, because identity, licensing and management tools connect directly. It is also a frequent choice for hybrid setups that keep part of the estate on premises.
Google Cloud is often chosen for data analytics, machine learning and Kubernetes-based workloads, and for organisations already using Google Workspace. Its managed Kubernetes and analytics services are the usual starting points.
For each provider, check the EU regions available for the services you need, the support plan, the egress pricing and the exit path. The regions published on the AWS, Azure and Google Cloud infrastructure pages are the authoritative reference, because they change often.
When is the cloud the wrong choice?
The cloud is the wrong choice when a workload is stable, runs at constant high load, depends on special hardware or very low latency to local equipment, or cannot legally leave your premises. In those cases owned or colocated infrastructure can be cheaper and simpler, and a hybrid setup is often the honest answer.
Steady, predictable workloads lose the main advantage of the cloud, which is paying only for variable demand. A server that runs at full capacity every hour of the year can cost less to own than to rent, once the hardware is amortised and operations are in place.
Legacy applications are the other common case. Moving an old system to virtual machines without changing it rarely delivers the expected savings, and sometimes adds latency and licensing costs. It is better to assess the application first, decide whether to rehost, refactor or retire it, and move only what benefits. A software audit is a practical way to make that call.
How do you move your business to the cloud?
Moving to the cloud starts with an inventory of applications and data, a decision on the target model for each one, and a phased plan that migrates low-risk systems first. The goal is not to move everything, but to move what benefits, with costs, security and data residency agreed before the first workload moves.
Our guide to cloud migration strategic planning explains how to build that plan, from assessment to cut-over. For companies that want the move handled end to end, WWG's cloud migration service covers infrastructure assessment, the migration itself and post-migration support and optimisation.
To discuss which cloud model fits your applications, write to our team at business@wwg.it.
Sources
- NIST, SP 800-145, The NIST Definition of Cloud Computing (Mell, Grance, 2011) — https://csrc.nist.gov/pubs/sp/800/145/final
- Red Hat, What is SaaS? — https://www.redhat.com/en/topics/cloud-computing/what-is-saas
- TechTarget, What is Platform as a Service (PaaS)? — https://www.techtarget.com/searchcloudcomputing/definition/Platform-as-a-Service-PaaS
- Amazon Web Services, Shared Responsibility Model — https://aws.amazon.com/compliance/shared-responsibility-model/
- FinOps Foundation, What is FinOps? — https://www.finops.org/introduction/what-is-finops/
- European Commission, EU-US data transfers and the Data Privacy Framework — https://commission.europa.eu/law/law-topic/data-protection/international-dimension-data-protection/eu-us-data-transfers_en
- European Commission, Data Act — https://digital-strategy.ec.europa.eu/en/policies/data-act
- AWS, Azure and Google Cloud, published region and location pages — https://aws.amazon.com/about-aws/global-infrastructure/regions_az/, https://azure.microsoft.com/en-us/explore/global-infrastructure/geographies/, https://cloud.google.com/about/locations
FAQ
Frequently Asked Questions
It can be, but only if it is configured well. Major providers invest in physical security, patching and threat detection at a scale few companies match. Many cloud incidents come from customer-side mistakes such as public storage buckets, weak access rules or missing multi-factor authentication, which remain your responsibility under the shared responsibility model.
Yes, especially through SaaS, which needs no infrastructure management at all. Running your own applications on IaaS or PaaS does require skills in security, backups, monitoring and cost control. Small businesses usually cover that with a managed service provider rather than hiring, so that someone is accountable for the environment every day.
Your data remains yours and can be exported, but the effort depends on the formats, the volume and the proprietary services you used. Since September 2025 the EU Data Act has set rules that make switching between cloud providers easier. Plan an exit path from the start by keeping data in open formats.
It depends on the number of applications, how they were built and how much each one must change. A few standard applications can move quickly, while a large estate with legacy systems is usually migrated in phases. An assessment of each application is the only reliable basis for a timeline.
