What Is Cloud Infrastructure?

No matter the types of cloud services you need, infrastructure is fundamental. Elasticity, security, reliability, uptime, cost efficiency, global reach, flexible deployments, database support, customer service—organizations looking to retire or supplement their local data centers need to consider all these factors when selecting a partner. That’s particularly true if they’re looking to integrate resource-intensive AI tools and workloads into their operations.

This article will highlight some of the advantages of using cloud infrastructure rather than maintaining your own data center and connect those dots to the technology choices made by cloud providers that make those benefits possible.

What Is Cloud Infrastructure?

Cloud infrastructure is a collection of hardware and software elements, including resources such as servers, storage, networking, and databases, that cloud providers offer on a pay-as-you-go, as-needed basis.

Elements of cloud infrastructure generally fall into three buckets:

Hardware: This includes servers, storage arrays, and other supporting hardware within the provider’s data center, such as power distribution, cooling, and secure facilities. The cloud provider is responsible for maintaining and upgrading hardware; the customer focuses on how best to use resources to meet its needs.

Virtualization: When virtualization software is used, a single server can appear as many servers, also known as virtual machines (VMs). VMs support applications with different operating systems and hardware requirements by creating software environments, called containers, to support each application’s requirements. Because VMs are software, they can be easily stopped, started, or moved from one physical server to another, providing organizations with the flexibility to meet their workload needs. Virtualization management software is commonly referred to as a hypervisor.

Network: The networking used in cloud data centers can be a differentiating factor among cloud providers. All will offer high-speed, low-latency networking. Some go further and offer networking features typically found only in high performance computing environments. Advanced providers use the networking layer as a security enforcement point by building zero trust principles into network routing and management. That helps ensure that communications between servers and storage systems occur only with explicit permission.

Cloud infrastructure vendors also focus on physical security, protecting assets with locked doors, guards, and tight access controls.

One key feature of a cloud infrastructure is scalability. In a legacy data center, capacity is fixed unless IT staff physically upgrade the hardware, which may require a new lease or facility build-out. This inflexibility can create performance and availability issues if there are spikes in demand from, say, products going viral or a merger or acquisition. With cloud infrastructure, changes in demand can be accommodated easily.

Cloud Infrastructure vs. Cloud Architecture

While the terms “cloud infrastructure” and “cloud architecture” refer to overlapping concepts, they’re different. Cloud infrastructure encompasses the physical and virtual components that comprise the cloud offering and are generally managed by the cloud service provider. Cloud architecture refers to the design, integration, and resource management considerations that dictate how the cloud infrastructure is used and configured. An example of an architectural consideration is automated load balancing, which ensures optimal stability for all customers sharing the public cloud.

Key Takeaways

• Cloud infrastructure refers to the servers, storage, virtualization, and networking needed to provide technology services over the internet instead of using a local data center.
• While legacy data centers use a CapEx model and tend to be built to accommodate worst-case demand levels, cloud infrastructure uses an OpEx model and can scale up and down.
• Cloud infrastructure may offer more flexibility, scalability, and ease of management versus legacy data centers.
• Cloud infrastructure can address geographic needs for regional data support or compliance requirements.

Cloud Infrastructure Explained

As technology becomes more complex and central to operations, many organizations have recognized the benefits of shifting from their own data centers to the cloud, which include the ability to add and remove resources in response to changing demands and pay only for what you use, the flexibility to shop a wide range of services and technologies, and the excellent reliability delivered by top cloud service providers (CSPs). Most CSPs have uptime track records that in-house IT teams are hard-pressed to match and offer built-in tools such as self-service analytics and automation for data integration workflows.

A robust and scalable infrastructure offers many benefits, including the following:

• Centralize data from devices, applications, and a remote workforce, enabling more timely and accurate data analysis. When cloud infrastructure supports automated data integration, prepared data can flow seamlessly into data lakes and other repositories.
• Quickly scale up software resources in a way that might be prohibitively expensive on local hardware.
• Accommodate the shift to remote work, which requires broader accessibility and more advanced security.
• Upgrade disaster recovery and add high availability and flexibility to failover strategies.
• Budget better because the fixed costs of cloud infrastructure are more predictable than the cost of in-house maintenance and upgrades.
• Meet regional and/or industry-related compliance requirements for data storage—for example, requirements that data be stored within certain geographical areas or at customer-designated locations. Cloud regions can help organizations comply with these mandates, as can cloud providers capable of deploying their clouds at customer data centers or colocation centers.

How Does Cloud Infrastructure Work?

Cloud infrastructure works through a combination of software, hardware, and networking tools that manage incoming resource demands. While the specifics of each customer’s infrastructure will depend on provider offerings and organizational needs, the process typically works as follows: A customer requests a resource, such as a new virtual machine, the cloud provider provisions the resource from its pool of available capacity, and the customer accesses the resource, usually over the internet, in a matter of minutes.

Let’s look in more depth at how that happens.

Within a cloud data center, the provider configures the necessary hardware. Because servers, storage, power distribution units, routers, and other needed devices are all installed and maintained at the data center, customer organizations need only worry about their internet connections, access controls, and budgets.

To logistically separate customer resources at the data center, the hypervisor creates new virtual machines and other virtualized resources that operate securely and independently. Within the virtual layer, resources such as compute power, storage capability, and other key elements are pooled together. Management software oversees these resources, automatically balancing loads as different clients present different resource needs. With automated management, the cloud provider’s resources will run efficiently as a whole without any individual account bogging down others.

This all happens on the provider’s side. Delivery of services usually happens via a standard internet connection but in some cases may be over dedicated lines or even on managed systems via racks of gear placed within the customer’s own data center.

Role of Cloud Infrastructure in Cloud Computing

Cloud computing refers to renting versus buying compute resources, storage, or other services. It’s an incredibly broad category, applied to nearly anything accessed over the web—for example, photos stored in a backup service, an enterprise CRM or ERP suite, or a GenAI-enabled database as a service. The huge cloud computing market is underpinned by cloud infrastructure. While a cloud application company could, in theory, operate purely out of a local owned data center, if demand suddenly spiked, the provider would likely lack the ability to keep up and, as a result, may lose customers. Providers of enterprise-class services can’t risk it, which is why many of these systems are built on hyperscale cloud infrastructure.

Because demand for cloud computing services can ebb and flow, flexibility is key. Cloud infrastructure is an excellent and cost-efficient way to address this core business need.

What Is Included in Cloud Infrastructure?

The term “cloud infrastructure” refers to a complex system that encompasses a provider’s physical hardware, management and virtualization software, and network capabilities, which combine to deliver a data center experience over the internet to many customers. Major cloud providers offer a wide range of features and benefits, including tools exclusive to each platform, such as self-service analytics or even operation-specific applications such as ERP and CRM.

To determine the best fit for their organizations, IT staff consider their processing, storage, latency, application, security, and compliance needs.

Components of Cloud Infrastructure

Cloud infrastructure includes much more than just servers in a data center. The checklist of components within a cloud infrastructure depends on the provider and includes hardware, software, networking, and physical elements such as cages to isolate segments, fire suppression systems, power, cooling, and more.

Key components include the following:

• The facility itself: Hyperscale cloud data centers—that is, those designed to accommodate a massive volume of workloads—often incorporate advanced technologies for automation, cooling, and connectivity to optimize performance and minimize costs. They tend to be in locations that offer low-cost yet reliable energy, inexpensive land, and proximity to major network hubs to minimize latency and enhance connectivity. Expect to find many layers of physical security and access controls, plus advanced climate systems and hedges against power outages, fires, floods, and other unpredictable events.
• Servers and other hardware: The gear you’ll find in a cloud data center includes servers with GPUs and CPUs, security systems, networking, cooling, and power supplies. A variety of storage devices accommodate needs from very high performance access to long-term archiving—hard drives, solid-state drives, and arrays store customer data for primary and redundant/recovery functions. Unlike local data centers, capacity expansion is handled completely by the cloud provider.
• Virtualization: The key components of virtualization used in cloud infrastructure are the hypervisor for virtual machine monitoring, individual virtual machines running in the hypervisor, management software used to oversee the virtualized infrastructure, and physical clusters of hardware to pool resources into virtual machines.
• Networking: The cloud provider is responsible for components that allow for network access by its customers and, where applicable, its customers’ customers. There’s also internal networking infrastructure that connects servers, storage, and other components, including routers, switches, and load balancers.
• Security: In addition to the physical measures discussed, cloud providers maintain firewalls, intrusion detection systems, encryption, and logical access controls to protect and isolate customer data and provide dedicated hardware if a customer requires it.
• Management systems: To efficiently run their businesses, cloud providers need specialized software to manage and monetize resources, including software that lets them automatically provision customer accounts, add and decommission services, and bill on a very granular level.

Cloud Infrastructure Delivery Models

Cloud infrastructure has three primary delivery models. Which a customer chooses depends on its requirements, IT resources, and budget. Often organizations use a mix of models to meet their needs, and in many cases, providers include tools such as self-service analytics, automated data transformations, and operational applications to better meet customers’ specific short- and long-term needs.

Infrastructure as a Service (IaaS)

IaaS puts the data center in the cloud, whether it’s a public cloud, private cloud, or hybrid cloud used in conjunction with a local data center. With IaaS, compute power, storage, and other key resources are virtualized and managed by the provider and offered to organizations over an internet or private connection.

Platform as a Service (PaaS)

PaaS builds on IaaS and offers services that aim to simplify application development and delivery. Popular PaaS offerings include database management systems, identity and authorization systems, analytics functions, low-code development tools, and AI infrastructure that allow for expedited development cycles—even with heavy workload demands—and make it easy for organizations to use leading-edge services to meet their diverse needs.

Software as a Service (SaaS)

SaaS refers to software delivered over the internet, usually through a web browser or a front-end application, such as a smartphone. Popular examples of SaaS include video and audio streaming, online gaming, and personal cloud storage. On the enterprise side, departments organizationwide, including HR, finance, and marketing, can benefit from applications delivered via the cloud. With SaaS, software is managed by the service provider, and the ability to scale, new features, and security updates are delivered automatically.

A related service is an enterprise integration platform as a service, or EiPaaS. This is a set of cloud-based services used to link many of a company’s applications, databases, and services, whether they run in an on-premises data center or the cloud.

What Are Cloud Infrastructure Adoption Models or Types of Cloud Architecture?

There are four main models of cloud infrastructure. The best fit for an organization depends on its specific needs, such as the volume of sensitive data, criticality and quantity of legacy applications, and expected resource demand.

The following are the four types of cloud infrastructure:

Public Cloud

In a public cloud, resources owned by a third-party cloud service provider are shared with all customers of that service. Public clouds are scalable and have a pay-as-you-go pricing model. The provider manages resources to distribute workloads so each account gets the appropriate support. That’s attractive to companies with uneven demand, such as retailers that see spikes during the holidays or firms that might see more demand at the end of the month or quarter.

Private Cloud

A private cloud uses the same model as a public cloud but is used by a single organization. This configuration offers greater security and privacy, though at a greater cost. A private cloud can be customized to meet very specific business needs and security or compliance requirements, and it may be provisioned in a private data center, a colocation facility, or the customer’s own data center.

Hybrid Cloud

A hybrid cloud allows organizations to combine local data center resources with public cloud offerings. IT teams gain significant flexibility with this configuration. For example, a company may choose to use a local data center for legacy applications that can’t be smoothly migrated or for regulated data that requires localization.

Multicloud

Multicloud refers to the use of multiple cloud platforms from different providers. Such a setup may integrate IaaS, PaaS, and SaaS in a tightly or loosely coupled architecture. A multicloud approach offers organizations flexibility, resilience, and the ability to avoid vendor lock-in, though it may be more complex to manage.

New agreements among major cloud providers are making this an even more attractive option for companies.

Benefits of Cloud Infrastructure

In general, cloud infrastructure is faster, more scalable, more accessible, and more cost-effective than a local data center because of how the CSP pools and virtualizes physical resources. In addition, cloud providers often have features and tools specific to their platforms that offer analytics, data management, data integration, AI, and other services.

The following are some universal benefits of cloud infrastructure:

• Cost efficiency: Local data centers require capital spending on hardware and software as well as investments in facilities and maintenance. And they’re often designed to meet worst-case demand levels even though, most of the time, the organization won’t require that capacity. Cloud infrastructure can be scaled up and down to align services with demand, and monthly operating costs reflect actual use.
• Elasticity: Through the use of virtualization, pooling of physical resources, and autoscaling, cloud infrastructure delivers an elastic environment capable of on-demand provisioning and the automated allocation of processing power and storage. That’s particularly critical for resource-intensive workloads such as AI model training.
• Flexibility and agility: Compared with owned data centers, the scalability and cost efficiency of cloud infrastructure allow organizations to take a more flexible and agile approach to IT. In addition, cloud providers can provide geographic distribution to help companies meet regional performance or compliance needs, as well as support for hybrid and multicloud strategies.
• Global reach: Cloud infrastructures can use a provider’s collection of regional data centers to offer fast, secure, and highly available access specific to different geographic regions. This geographical flexibility can address latency, compliance, and edge access needs in ways a local data center can’t.
• Disaster recovery and business continuity: Cloud infrastructure providers generally have extremely robust disaster recovery plans and automated backup and recovery technologies in place to minimize downtime and streamline the process of restoring operations after an incident. The geographic distribution of cloud data centers helps protect against the impact of localized disasters, such as hurricanes, as data is stored redundantly across multiple locations. And the cloud lets users access critical applications and data from any location, helping employees maintain productivity even in the face of disruptions.
• Reliability and high availability: The level of reliability a cloud provider offers would be difficult and expensive to replicate in-house, given a CSP’s redundant power, cooling, and networking, including internet connections from more than one carrier. Many providers also offer high availability computing systems that have no single points of failure and provide nonstop service for critical workloads. While high availability systems have historically been expensive to own or use as cloud resources, recent architectural innovations have made these systems affordable for many more customers.
• Scalability: In a local data center, scaling up processing power or storage capacity generally requires hardware upgrades. This impacts capital budgets, making it nearly impossible to address demand spikes in real time. Cloud infrastructure allows for the lateral allocation of resources to meet current needs.
• Security: Cloud infrastructure security teams often have access to advanced tools and top expertise that most local data centers can’t match. Cloud systems offer core security features, such as encryption and role-based access control, and put a stronger emphasis on compliance and certifications. Leading providers also now offer zero trust architectures, which improve security by limiting access to individuals and systems explicitly authorized to use a given resource.

Cloud Infrastructure Challenges

Every organization has its own unique network and processing needs, which means that some cloud providers will be a better fit than others. IT teams should consider the following challenges when evaluating cloud platforms:

• Compliance: Regions and industries have a range of compliance requirements for security, the geographic location of data storage, and more. Sovereign data management requirements often go beyond locality restrictions to include nationality requirements for staff and rules on how data is used and kept safe. Cloud providers are increasingly providing ways to comply with these requirements, including putting cloud infrastructure into any data center and letting the customer specify who will manage the system.
• Cost management: Because cloud infrastructure is billed based on a pay-as-you-use model, the exact monthly cost will generally vary. This means that, without proper planning and management, unexpected charges can pile up. To get ahead of this, IT departments should put cloud cost controls in place to ensure that, for example, VMs that are spun up to meet a temporary need are decommissioned and that all applicable discounts are being applied.
• Data management: Cloud infrastructure opens the door to more flexible and agile use of data. As AI becomes embedded in applications and available to more users through natural language interfaces, organizations will need to update their data management, integration, and governance policies. Provider tools such as automation and data catalogs can help organizations get a handle on large volumes of data, allowing for faster and smoother data management and setting them up to transition to self-service analytics and other applications that can help improve efficiency and insights.
• Governance: The right cloud infrastructure provider with the right set of tools can go a long way in helping an organization address its governance requirements. Moving to the cloud can significantly enhance employees’ ability to get more from their data thanks to interconnectivity among tools, applications, and repositories. Establishing data lakes connected to enterprise applications, sources of unstructured data, and AI analysis tools can allow organizations to use their data more comprehensively and analyze it more easily. The trade-off, however, is a need for greater oversight, often requiring governance strategies such as role-based access control. AI tools can assist with governance tasks, including data classification and anomaly detection. Getting all that right—letting just the right users work with just the right data—is a new governance task, but the potential improvements in insights and productivity will likely be worth the effort.
• Integration and multicloud: Public cloud infrastructures are built for integration thanks to open standards that enable smoother data flows, though egress fees continue to be a sticking point. Sharing data among applications running on different providers’ clouds may be technically easy, but it can create governance, performance, and cost issues. To address this, industry leaders have started to support true multicloud setups. For example, Oracle partners with fellow hyperscalers to run its databases and other cloud services within AWS, Google Cloud, and Microsoft Azure data centers, improving performance and minimizing egress fees. Multicloud strategies are critical, particularly to large companies with applications running in two or more clouds.
• Migration: While many migrations can be completed simply and quickly, organizations should always consider the various factors that may necessitate greater support: legacy application needs, third-party application needs, on-premises data, the availability of cloud-based application upgrades, and multicloud/hybrid cloud considerations. These realities require organizations to create a migration roadmap that demonstrates the trade-off between migration and value—and in many cases, cloud providers will offer tools and services to help with migration, along with realistic estimates of the time required to address various issues that crop up.
  
  If you’re using third-party applications on-premises, the job of migrating them to the cloud will be highly dependent on the vendor in question, the version you’re running, and the customizations added. Vendors now typically offer cloud versions of their applications, so as long as you’re on a recent version, the vendor will offer tools that help with migration. Customizations will still need to be handled. That, along with verifying that the cloud versions of your applications are working, takes time. So-called lift-and-shift operations, where applications are moved to the cloud without changing their performance or features, can take from three months to a year or more. Any migration roadmap should include how you’ll derive more value from those applications once they’re moved.
• Performance: Cloud infrastructures are fast. In some cases, they’ll offer substantial performance improvements, particularly if your on-premises infrastructure is dated. Further, if you’ve got employees working remotely, they’ll typically see productivity boosts when using apps delivered via the cloud. Potential performance issues tend to arise under specific situations, however, such as when the network is processing resource-heavy workloads, when legacy apps haven’t been optimized for the cloud, or when end users have poor internet connections. In addition, region-specific demands and edge devices may bring distance-based latency issues. To get ahead of these challenges, build a solid migration plan and test frequently to ensure that performance is as expected. Note too that performance issues may crop up when data repositories remain local but applications move to the cloud. Applications not designed to work over internet connections can see performance problems.
• Security: Cloud providers’ security procedures and expertise are better than those of most organizations. They have to be since the provider’s reputation depends on protecting systems and data for its customers. But that doesn’t mean that security isn’t still a primary consideration. Ransom attacks have become more sophisticated and more successful. So whether systems are on-premises or in the cloud, approaches to security need to consistently evolve. As an example, zero trust principles, where only users, systems, and operations that are explicitly permitted are allowed, are increasingly important. Cloud providers can help meet security requirements by providing management tools for functions such as role-based access control, certificates, encryption keys, and vulnerability monitoring.
• Skills gaps: Moving to a cloud infrastructure provider will require you to adopt a new set of management tools and features. What experience does your IT staff have with the proposed CSP? The answer is going to vary for each organization. A skills gap isn’t necessarily a showstopper, but as teams consider their strategies for migration and ongoing operations and development, they should carefully consider training needs.
• Vendor lock-in: Cloud providers may use proprietary tools and APIs for their platforms, which can create vendor lock-in. Similarly, if an organization’s IT team is focused only on building skills for a particular CSP, vendor lock-in may be an organic by-product. To counter this, IT staff should avoid proprietary technologies to the extent possible. Most cloud providers support open standards to at least some degree—the extent to which open standards are available should be a key factor in choosing cloud providers.

Run Securely and Faster with OCI

Oracle Cloud Infrastructure (OCI) is a globally available hyperscale cloud with all the services needed for enterprise workloads, including GenAI. Secure, fast, and scalable, OCI is available in multiple global cloud regions and customer-designated locations to help organizations comply with their data governance requirements. In addition, OCI provides more than 100 infrastructure and platform services, all with flexible and incremental service usage so customers pay only for the performance they need.

Cloud Infrastructure FAQs

What is an example of cloud computing infrastructure?

An everyday real-world example of cloud infrastructure is a streaming video service. These services require a scalable foundation that optimizes compute performance and provides storage on demand while maximizing availability for the end customer. A company such as Netflix has thousands of servers across the world for a combination of redundancy and minimal latency thanks to geographic proximity between user and server. On an enterprise level, consider a large ecommerce company that uses an IaaS provider to host its online platform and quickly scale its infrastructure during peak shopping seasons, such as Black Friday or Cyber Monday, without requiring significant capital investment in physical servers or data centers. This flexibility allows the enterprise to pay only for the resources it consumes, helping ensure efficient cost management while also providing the ability to rapidly deploy additional computing power, storage, and networking capabilities to meet customer demand.

How can a cloud infrastructure help with data governance?

A cloud infrastructure can enhance data governance by providing centralized control, increased visibility, and automated compliance management. Organizations can implement consistent policies across all assets stored in the cloud, helping ensure that data is managed according to regulatory requirements and internal standards. Furthermore, cloud platforms often come with built-in tools for tracking data movement, monitoring access, and auditing use, which helps organizations maintain accountability and transparency. Some cloud providers also offer regional support to help with local compliance needs—in fact, top hyperscalers even offer private versions of their public clouds, which can be located at a customer's site.

Why is cloud infrastructure better than a local data center?

Cloud infrastructures are highly scalable, available throughout the world, and come with rich sets of data management and analytics tools available to systems running within them. More recently, AI tools, including GenAI and AI agents, are proving adept at developing new, helpful applications that are easily used in the cloud. In a cloud infrastructure, users can mine data using natural language prompts and develop applications using low-code and no-code tools. All of this is available without IT needing to manage more services and more hardware in the local data center.

How do service level agreements work for cloud infrastructure?

Service level agreements (SLAs) provide customers with tiered guarantees for uptime, speed, disaster recovery, and other key metrics. For enterprise workloads, knowing what SLAs are available and at what cost is a critical part of deciding on a cloud provider. For particularly complex workloads, customized SLAs can sometimes be negotiated between the provider and customer.