Need for Compute
- For any organizations, applications mean business and to run the applications we would need servers, operating system etc
- Consider the below architecture of the application

- Generally in the traditional enterprise to realize this application we have 2 ways
- Physical Infra
- As shown in the above image, we would have 3 physical servers and we install necessary os & install softwares and deploy applications
- Virutal infra:
- Organizations use hypervisors (like vmware ) to create multiple virtual machines on the same physical server to effectively use hardware resources

- Organizations use hypervisors (like vmware ) to create multiple virtual machines on the same physical server to effectively use hardware resources
- Physical Infra
- Constraints of On-Premises Infrastructure:
- Consider this application is used by customers in UK, we need to physical infra in UK. Business over different parts of the globe might be a costlier choice
- Scaling servers is possible but always dependent of free resources
- Datacenters can go wrong, Disaster Recovery needs to be setup.
- Cloud: Cloud Service Providers have infrastructure across the globe and we can use that infra to realize our applications.
- With cloud global applications are easier to create

- Scaling up or down (Elasticity) is easier to setup
- Business continuity and Disaster Recovery is also easier than physical infra
- In Cloud we are responsible for virtual infra not physical.
- When we create a virtual machine, we assign
- CPU and RAM from Physical server
- virtual disk from some physical storage
- some operating system to the virtual machine
- some virtual network to get ip address to virtual machine
- If we get one level deeper. When VM is running
- it uses CPU, RAM
- it uses virtual disk
- it uses virtual network
- When VM is stopped
- it needs virtual disk
- For the above mentioned reasons, when virtual machines are running you will be charged hourly for cpu/RAM + virtual disk cost + os license cost (hourly) and if you stop the vm you will still be charged hourly for virtual disk.
- Even in the case of AWS where we call Virtual machines as EC2 instances the pricing is applied as mentioned above.
- With cloud global applications are easier to create
