A public cloud is a model in which computing resources are delivered over the internet by external providers and shared among multiple organizations. These providers host services on a common infrastructure that serves different users simultaneously. 

Public cloud environments support enterprise tasks such as running CRM tools or handling analytics workloads. Examples include Amazon Web Services (AWS) and Microsoft Azure.

Public clouds fall within the broader category of cloud computing, which replaces local systems with hosted infrastructure. Public cloud services provide users with access to computing environments that do not rely on in-house hardware. Resources are available on demand and configured through online dashboards.

Providers manage the physical infrastructure in remote data centers and use software to create separate virtual environments for each customer. Enterprise teams avoid managing physical infrastructure and can scale resources directly to meet shifts in demand, such as traffic spikes during peak retail periods.

How does a public cloud work?

Public cloud technology enables enterprises to deliver consistent digital services across teams and regions — even as demand fluctuates. Here’s how they work: 

Building global data center infrastructure

Public cloud providers operate large networks of physical data centers. These facilities house the infrastructure needed to store data and run applications. For example, a healthcare organization might store patient data in a regional data center to meet privacy regulations and provide clinics with fast, direct access to records.

Virtualizing and scaling compute resources

Once the physical infrastructure is deployed, public cloud providers use virtualization software to create isolated environments on shared servers. Each environment operates independently, running its own applications and operating system. Network isolation is often configured using technologies such as virtual private clouds (VPCs). For example, a financial service provider may scale its virtual resources during trading hours to handle real-time market data processing.

Providing access via APIs and dashboards

Users interact with the cloud through web dashboards or application programming interfaces (APIs). A hospital system might use an API to schedule backups or monitor server status without manual input.

Pooling and allocating capacity to users

The provider pools resources and assigns them based on current demand. A retailer preparing for a product launch can temporarily draw more computing power, then release it when traffic subsides.

Automating services and enforcing SLAs

Automation applies updates and adjusts system performance in real time. Providers commit to service level agreements (SLAs) that ensure availability during critical periods, such as when financial systems process transactions or healthcare platforms manage patient access.

What are the different types of public cloud? 

Public cloud services are available in different formats, each offering a distinct balance between user control and provider management.

Infrastructure as a Service (IaaS)

IaaS provides access to computing power or storage through virtual machines. External providers set up the hardware and perform maintenance, while users install and manage their own software. A finance team might use IaaS to host a reporting system that processes data from multiple departments.

Software as a Service (SaaS)

SaaS delivers software through a browser or app, removing the need to install or maintain programs locally. Some platforms are beginning to offer emerging tools such as Retrieval-Augmented Generation as a Service (RAGaaS) to support AI-powered tasks. The provider handles updates and ensures availability, allowing users to focus on their daily operations. For example, a healthcare organization might use SaaS to access patient records and manage appointments across different clinics.

Platform as a Service (PaaS)

PaaS helps teams create and deploy applications. It provides tools for writing code and running services without requiring the management of physical infrastructure. A retail company might use PaaS to develop a system that adjusts prices based on local demand.

Public cloud use cases 

Public cloud adoption is accelerating worldwide. Gartner estimates that spending on public cloud services will reach USD 679 billion by 2027. Separate projections from market analysts project that the total market will approach USD 987.7 billion in the same timeframe.

Enterprises utilize public cloud services to maintain system availability during periods of high demand. Below are examples of how healthcare, retail, and financial sectors use the public cloud to deliver services at scale.

Scalable medical image storage

Hospitals manage large volumes of imaging data across departments and sites, and many now explore generative AI in healthcare to support diagnostic workflows. Technicians upload scans into a central system that scales with growing data. Radiologists in other facilities can access and review results immediately, even during periods of high demand.

Omnichannel retail application hosting

Retailers use cloud infrastructure to connect store systems with digital platforms, often integrating enterprise search to surface data across locations and services. Development teams run applications from a shared environment, pushing updates to all sites at once. A customer browsing online can save an item to their account and complete the purchase later in-store without having to start over.

Real-time financial risk analysis

Banks now run advanced models, including large language models (LLMs), to flag risk indicators during live transactions. Trading platforms scale up computing power during volatile periods and scale down once markets settle. Analysts work with real-time data, while the cloud environment automatically adjusts to maintain system performance.

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