What Is Cloud Computing? An Azure AZ-900 Guide

Cloud computing is the delivery of computing services over the internet, so you can rent technology instead of owning it. Those services include compute (processing power such as virtual machines), storage (space to keep files, databases, and backups), and networking (the connections that tie everything together). A cloud provider such as Microsoft Azure owns the physical datacenters, servers, and hardware, and lets you use that capacity on demand.

The word on-demand is important. You request resources when you need them and they are ready in minutes, not the weeks or months it takes to buy and install physical equipment. When you no longer need a resource, you switch it off and stop paying for it. This is very different from a traditional setup where you buy servers up front, house them in your own room, and maintain them yourself whether they are busy or idle.

Because the provider runs the underlying infrastructure, you can focus on your applications and data rather than on cables, cooling, and hardware failures. On the exam, remember the core phrase: cloud computing is the on-demand delivery of compute, storage, and networking over the internet on a pay-as-you-go basis. That single sentence captures what every Azure service has in common.

The consumption-based model means you pay only for the resources you actually use, and only for as long as you use them. There is no large payment up front and no charge for idle capacity you have not requested. If you run a virtual machine for three hours, you pay for three hours; if you store fifty gigabytes of data, you pay for fifty gigabytes. This is what people mean by pay-as-you-go.

This model brings real advantages. You stop guessing capacity: instead of buying enough hardware to survive your busiest day and letting it sit idle the rest of the year, you scale your spending up and down with real demand. You also pay for what you consume rather than for what you predict, which lowers waste. And because a resource can be created in minutes, you can experiment cheaply and delete anything that does not work out.

For example, an online shop expecting a holiday rush can add extra Azure capacity for December and remove it in January, paying only for that busy period. A traditional business would have had to buy servers for the peak and keep paying for them all year. On the exam, the trigger phrase "pay only for what you use" points straight to the consumption-based model.

Cloud computing changes not just how you buy technology but the kind of expense it is. Traditional, on-premises IT is a capital expense (CapEx): you spend a large amount of money up front to buy physical assets such as servers, storage arrays, and networking gear, plus the datacenter to house them. You own those assets and typically write off their cost over several years, whether or not you use them fully.

Cloud computing is instead an operating expense (OpEx): an ongoing cost for a service you consume, billed as you go, much like a utility bill for electricity. There is no big purchase and nothing to own or depreciate — you simply pay for the resources you used this month.

On the exam, a scenario describing buying and owning datacenter hardware is CapEx, while paying monthly for cloud resources you consumed is OpEx. Cloud shifts spending from CapEx to OpEx.

The shared responsibility model describes how security and management duties are divided between the cloud provider and you, the customer. Moving to the cloud does not make everything the provider's job, and it never makes everything yours. Each side owns part of the stack, and knowing where the line sits is a favorite exam topic.

Some responsibilities always stay with you no matter which service you use: your data, your accounts and identities, and the devices your people use. Some responsibilities always belong to the provider: the physical datacenters, physical hosts, and physical network. Microsoft secures the buildings, the servers, and the cabling — you can never manage those.

The rest of the responsibilities shift depending on the service type. The more the provider runs for you, the more responsibility moves to them.

Reading down the columns, you keep more control with IaaS and hand off more with SaaS, but you are always responsible for your own data and identities. On the exam, the phrase "provider and customer both secure parts" signals the shared responsibility model.

A cloud deployment model describes where your cloud resources live and who has exclusive use of the underlying hardware. There are three models to know for the exam: public, private, and hybrid.

A public cloud is owned and operated by a cloud provider such as Microsoft Azure and shared across many organizations over the internet. You do not own any hardware; you rent capacity alongside other customers, though your resources are logically isolated from theirs. It offers the lowest up-front cost and the fastest access to huge scale.

A private cloud is used by a single organization. The hardware may sit in your own datacenter or be hosted for you, but it is not shared with anyone else. A private cloud gives the most control and can help meet strict security or regulatory rules, but you take on more responsibility and cost.

A hybrid cloud combines public and private, connecting them so workloads and data can move between the two. It lets you keep sensitive systems private while using the public cloud for scale, flexibility, or overflow.

Each deployment model suits different situations, and the exam often asks you to match a scenario to the right one. Use these guidelines.

Choose a public cloud when you want low up-front cost, fast setup, and the ability to scale to very large workloads without buying hardware. A startup launching a new web application, or any team that wants to experiment and grow quickly, is a natural fit. You accept less control over the underlying hardware in exchange for speed and flexibility.

Choose a private cloud when you need maximum control or must meet strict compliance, security, or data-residency requirements that call for dedicated, single-tenant hardware. A bank or a government agency with rules about exactly where and how data is held may prefer a private cloud, accepting higher cost and more management in return.

Choose a hybrid cloud when you want the strengths of both. A common example is a hospital that keeps confidential patient records in a private cloud for compliance while running its public-facing website and appointment booking in the public cloud. Another is a business that runs day to day on private infrastructure but bursts into the public cloud to handle seasonal spikes. If a scenario mentions keeping some systems private while using the public cloud for the rest, the answer is hybrid.

Let us tie the ideas together with one story. Imagine a small company, Contoso, that currently runs its accounting software on a few aging servers in a cupboard. Those servers were a capital expense: bought up front, owned by Contoso, and maintained by its own staff whether busy or idle.

Contoso decides to move to Microsoft Azure. Now it rents virtual machines and storage on demand over the internet and pays only for what it uses each month — its spending has shifted from CapEx to an ongoing operating expense. Under the shared responsibility model, Microsoft secures the physical datacenter and hardware, while Contoso stays responsible for its own data, user accounts, and access.

Because Contoso must keep some financial records on dedicated hardware for compliance, it keeps those in a private cloud and runs everything else in the public cloud — a hybrid arrangement. When the busy end-of-year period arrives, it adds capacity for a few weeks and removes it afterward, paying only for that peak thanks to the consumption-based model.

That single example uses every idea in this lesson: on-demand delivery over the internet, pay-as-you-go, CapEx versus OpEx, shared responsibility, and the public, private, and hybrid deployment models. If you can explain Contoso's move, you understand what cloud computing is.