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  • Have you ever taken a minute to gaze up at the clouds?

  • You might see a dog, a dinosaur,

  • or your data?

  • Okay, your data isn't actually stored in a cloud in the sky,

  • but it's easy to think so when there's so much talk about cloud computing.

  • So how does the cloud work?

  • The cloud is a global network of servers around the world acting as one massive hard drive.

  • Every time you sign into your Gmail account, watch a show on Netflix

  • or open a file from Dropbox, you're using the cloud.

  • Before the cloud, you might have backed up your documents, photos or music

  • to an external device like a CD-ROM or to your computer's hard drive.

  • Now, you can back-up all of that information to the cloud.

  • When I back-up my iPhone to the cloud, my files are sent to servers in Apple's data centers all around the world.

  • I can access those servers by connecting to the internet.

  • So even if I lose or break my phone, not that it's ever happened before, that data isn't lost forever.

  • There are a few obvious benefits to consumers from the cloud

  • besides giving you peace of mind if you lose your phone.

  • You can access your data anytime, anywhere if you're connected to the internet.

  • And you don't have to worry about using up all of the storage on your hard drive.

  • Meaning you might not have to pay as much for a device that comes with a ton of storage.

  • Businesses are also benefiting big time from cloud computing.

  • It's estimated worldwide revenue from the cloud will exceed $200 billion in 2019,

  • that's up from $145 billion just two years ago.

  • You've probably heard of the two biggest names in the market,

  • Amazon Web Services, known as AWS, and Microsoft Azure.

  • IBM, Google and Alibaba are also big players when it comes to providing cloud services.

  • It's not just big tech moving business into the cloud.

  • Smaller companies are buying in too as a way to grow their businesses.

  • Just think, instead of having to buy all of this hardware to backup your data,

  • you can store an unlimited amount of information online.

  • Many cloud services are based on a subscription pricing model.

  • That means customers pay, for example, a monthly fee for cloud services

  • and they can scale up or down as needed. And cloud providers are cashing in.

  • AWS accounts for roughly 12 percent of Amazon's quarterly sales,

  • but it generates more than half of the company's operating income.

  • Before we get too excited about the cloud, let's take a step back and look at some of the risks.

  • One obvious concern, if all of our data is online, what happens when the internet goes down?

  • That's what happened in 2013 when an AWS outage took down Instagram, Vine and Airbnb.

  • Cyber attacks are another big risk with research showing

  • around one-fifth of all files in the cloud contain sensitive data.

  • Finally, it can be tough for consumers and businesses to switch between different cloud companies.

  • I might have a hard time syncing my iCloud and Google Drive accounts.

  • That can give some big companies, that are already making big money on the cloud,

  • a lot of power over our data.

  • Hey everyone, it's Elizabeth. Thanks so much for watching.

  • Let us know if you have any other ideas for CNBC Explains and leave any ideas in the comments section.

  • Be sure to check out all of our other videos over here.

  • See you later!

Have you ever taken a minute to gaze up at the clouds?

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What is the cloud? | CNBC Explains

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    April Lu posted on 2018/11/27
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