What is the cloud?

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When software developers say "the cloud," they really mean computers full of data that users can access from anywhere using an Internet connection. In effect, the cloud is marketing shorthand for the reality that a lot of computing activity now happens in third-party data centres instead of an individual user's phone or desktop computer.

In recent years, the cloud has become one of the biggest and most lucrative branches of the technology industry. The research firm IDC reports that IT spending by companies on cloud services reached nearly $50-billion in 2013, and could rise to more than $107-billion by 2017. Tech heavyweights such as Microsoft Corp., Google Inc. and Amazon.com Inc. have spent billions trying to gain a foothold in the cloud market, and the massive database company SAP recently invested in a cloud-services data centre in the Toronto area.

Cloud customers range from massive corporations to individual users. Netflix Inc., for instance, doesn't own much of its server infrastructure and instead relies on a part of Amazon.com called Amazon Web Services (AWS). AWS is one of many companies that builds and operates many, many rooms filled with banks of powerful, Internet-connected computers to host things such as movies, TV shows, your shopping history and even software tools you can access without having to download anything on your personal machine.

Even if they don't know it, many regular consumers use cloud services every day. Google's Gmail is cloud-based e-mail, and even "ephemeral" photo-sharing services such as SnapChat host images in the cloud. Most mobile phone software, from music streaming apps to Instagram, will keep user data in the cloud. Many users also rely on the cloud for tasks such as data backup or large-file sharing online (using services such as Apple Inc.'s iCloud, Dropbox and Microsoft's OneDrive).