Fig 1.1 Traditional Applications

As seen in the diagram, the hardware infrastructure (database and Application Layer) which typically included server machines were being maintained individually by every company. Developing and maintaining such architecture does involve manpower, space and a considerable maintenance cost.

Cloud Based Application Architecture:

As seen in the diagram, in the cloud based approach an Infrastructure Provider Company maintains the infrastructure and multiple organizations share the same resources. Organizations can now forget about allocating space, manpower and budget for the infrastructure. They can readily purchase the required resources from the Infrastructure Provider Company and be up and running in a short span of time. As the organization grows in the future (more data /more users), they could purchase additional resources and expand.

The table below summarizes the basic difference between the two.