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Storage has always been a primary reason why companies turn to cloud computing. Clouds are ideal for backing up data and storing archival data. This is underscored by the advent of object storage, which makes vast data stores practical. Over time, providers offered additional use cases such as Software as a Service (SaaS), which delivers applications from the cloud, and Infrastructure as a Service (IaaS), which augments or replaces the whole data center.

Solutions must be cost-effective for companies and yet profitable for providers. The keys are economies of scale and efficiencies. Virtualization is the sauce that makes clouds work. Providers use virtualization to efficiently pool storage resources and enable multi-tenancy, thus leveraging hardware and lowering the costs of storage and computing. They can deliver scalability and services like cloud bursting, increasing the value of their offerings to customers. Now it’s up to providers to deliver performance, security, and compliance to ensure clouds make more business sense than do-it-yourself data centers.