Understanding Cloud Concepts

One of the skills measured in “Exam MB-900: Microsoft Certified: Dynamics 365 Fundamentals” is understanding cloud concepts. It is important to understand cloud architecture as well as comparing cloud services and cloud offerings. Microsoft’s cloud offering is Azure, so it is essential to know how Azure fits. This blog post will share an overview of cloud computing and attempt to cover the topics that may relate to the exam.

Cloud Computing Overview

Microsoft provides the most straightforward overview of cloud computing.

Simply put, cloud computing is the delivery of computing services—servers, storage, databases, networking, software, analytics, intelligence and more—over the Internet (“the cloud”) to offer faster innovation, flexible resources, and economies of scale. You typically pay only for cloud services you use, helping lower your operating costs, run your infrastructure more efficiently, and scale as your business needs change.
What is cloud computing? A beginner’s guide.

There are many different activities related to cloud computing. An individual or company could be hosting a web page, using email, creating documents online, running applications over the internet, or even connecting to a virtual machine online. Cloud computing makes what we do on the internet every day possible. For businesses, it can also be a way to have maximum performance and scalability at a fraction of the cost of managing the infrastructure in-house.

Cloud Service Provider

Cloud service providers are those companies that offer various cloud services. They maintain the hardware infrastructure and the technical resources to support it. Payment for services is typically calculated based on usage. That allows the flexibility to expand or shrink usage of the cloud services to optimize expenses and maintain the reliability of services during peak times. Examples of cloud service providers are Amazon, Google, and Microsoft.

Virtual Machines

A virtual machine (VM) is an emulation of a computer running on another server. It has an operating system and virtualized hardware capable of managing multiple tasks. It is the most flexible of cloud offerings, as it gives complete control of the environment and applications running in that environment. The cloud service provider still maintains the hardware, networking, and security of the underlying infrastructure, while the user or company IT department manages the VM. The benefit of a virtual machine over a physical server is that a VM can be created quickly at a fraction of the cost required to set up a new computer.


A container is an isolated execution environment for applications. Unlike a virtual machine, there is no operating system in a container. Instead, a container holds the application and all its dependencies in an isolated process. Containers are smaller than VMs and can be started up much quicker, as there is no operating system to initialize. As a container has everything it needs for the application to execute, it can be passed between environments seamlessly.

Serverless Computing

Serverless computing differs from a VM or container in that application code is executed without the need to create or maintain a server. In this case, an action triggers a related application function. Automated tasks, such as sending of automatic email responses, is an ideal use of serverless computing. This functionality is often less costly than a VM or container, as the only charge relates to processing time. As each function is an isolated process, this is also the quickest way to deploy to the cloud.

Public Cloud

With the public cloud, there is no local hardware. Everything in the public cloud is managed and paid for by the cloud service provider. This type of service often charged on a pay-for-usage basis. It is the most common type of cloud service. Amazon Web Services, Google Cloud, and Microsoft Azure are examples of public clouds. The advantages of this type of service are pricing and service flexibility, without the need to maintain infrastructure. This type of cloud has disadvantages as well, such as compliance and security requirements that may not be met by a cloud service offering. Legacy applications may not necessarily be able to function in the public cloud space either.

Private Cloud

A private cloud replicates the functionality of a public cloud, except that infrastructure is typically not managed by a cloud service provider. Companies implementing a private cloud must purchase the hardware and hire the technical professionals to maintain that infrastructure. As this is an isolated cloud instance, it has the advantages of security and compliance that may not be possible in a public cloud. The most significant disadvantage to the private cloud is in terms of cost and flexibility. All the hardware is purchased up front, and if there are insufficient computing resources for the demand, additional hardware will need to be purchased.

Hybrid Cloud

The hybrid cloud is a combination of both the public and private cloud. A hybrid cloud is used in scenarios where the private cloud is necessary for security, compliance, legal, or legacy applications, yet other, less secure, applications can be executed with the scalability and flexibility of the public cloud. Many times this is also used as companies migrate from legacy on-premise infrastructure to the public cloud. This scenario, while sounding like the best of both worlds, could potentially be more complicated and more expensive to operate and maintain.

Government Cloud

Government agencies have specific security and compliance needs. Many government regulations and requirements are associated with the handling of sensitive data. These security and compliance needs are not able to be met in typical public cloud solutions. Separate isolated data centers and network infrastructures are required to meet the needs of government agencies in the government cloud. This infrastructure is designed to meet the stringent security and compliance policies that are needed.

On-Premise vs. Cloud

On-premise infrastructure is different from the private and public cloud. With on-premise, all the hardware is physically located where the company does business. On-premise infrastructure may or may not be accessible to the internet, depending on the security needs and requirements. All hardware must be purchased upfront, as well as hiring the technical resources to maintain the infrastructure. Private cloud takes the on-premise solution and moves it to the internet. The hardware is no longer located locally but instead stored in one or more data centers. Like an on-premise infrastructure, the hardware and technical resources to manage the hardware, are the responsibility of the company. For a private cloud, the underlying network is managed by the data center. Hybrid clouds take that to the next step, pushing more of the infrastructure into being managed by a cloud service provider in the public cloud. Hybrid clouds can communicate with both the public and private clouds for the company. Finally, the public cloud moves all infrastructure management to the cloud service provider, leaving the company to focus on their specific business requirements, and only pay for what is required and used.

Infrastructure as a Service

Infrastructure as a Service (IaaS) is the lowest level of the cloud computing stack. It provides complete control over the virtualized hardware and operating systems. Instead of buying the necessary hardware upfront, VMs are rented and paid for based on usage and virtual hardware requirements. The cloud service provider manages the underlying infrastructure. IaaS gives instant computing power over the internet that can be powered on and turned off quickly and easily.

Platform as a Service

Platform as a Service (PaaS) is the middle level of the cloud computing stack. It provides an environment for building, testing and deploying software applications. This type of service offers the necessary tools and resources for development and testing, without the need to worry about the underlying hardware, operating system, and security considerations of the platform. The focus for the user can remain on the application.

Software as a Service

Software as a Service (SaaS) is the top level of the cloud computing stack. It offers subscription-based pricing to online applications. An example of this would be Gmail and Outlook for email services or Office 365 for productivity software. Dynamics 365 is another example of a SaaS offering.

Cost Option Comparison

When it comes to determining the best cost options for comparison, it is essential to look at the capital expenditure (CapEx) as compared to the operational expenditure (OpEx). CapEx entails the upfront costs of doing business. The expenses include purchasing the necessary hardware infrastructure required to do business. OpEx doesn’t have the upfront cost of CapEx and is usually paid for over time. OpEx includes employee salaries and subscription services.

On-premise, private cloud and hybrid cloud all have significant CapEx costs associated with them. These costs include the necessary server hardware, storage needs, networking components, as well as backup and archiving fees. Also, there are OpEx costs associated with the technical employees that are required to manage the infrastructure, as well as the recurring costs for the network bandwidth requirements, software updates, and so on.

The public cloud doesn’t have the CapEx costs seen in on-premise or private cloud environments. Instead, you have OpEx costs of renting the services or paying the subscription licensing fees. As the cloud provider handles the maintenance of the infrastructure, it reduces the need for the technical employees, thus reducing the overall cost to the company.

Microsoft Azure

Azure is the cloud computing offering from Microsoft. It offers over 100 different cloud services to help businesses build and deploy their services to the cloud. It ranges from application hosting through virtual machines to run a variety of custom services and offerings. It is a global service, with data centers in over 50 regions. Also, it provides many security and compliance offerings to ensure that data is protected.