How Does Cloud Storage Work? A 2020 Guide for the Uninitiated

By Ben Stockton
— Last Updated:

Cloud storage is a service that you can use to store data on remote servers. Cloud storage works by letting you access that data over the internet, allowing you to store and retrieve your files from anywhere in the world where you have an internet connection. 

In this article, we’ll be taking a deeper dive into cloud storage for those who are new to the concept. We’ll be looking in more detail at how cloud storage works, the different types of cloud storage and some of the benefits of using it. 

We’ll mention some great cloud storage providers along the way, but we suggest you take a look at our list of the best cloud storage as a good starting point. This guide has everything you need to know about cloud storage, so read on to find out more.

What Is Cloud Storage and How Does It Work?

When you store files on your computer, the files are saved on your hard drive or on another form of removable storage media, such as flash drives or external hard drives. As an alternative, cloud storage works by sending your files over the internet and saving them on remote computers designed to host them (called servers).

These servers are designed to be connected to remotely. This means that you can access your files from anywhere and on any device, so long as you have internet access (and the service supports your device). The same server can host the data of multiple users, but you will only be able to access the files from your own account. 

In addition, your files may be shared with other servers, to ensure that nothing is lost if a server goes down. This gives you redundancy, meaning data loss is much less likely to occur.

In simple terms, cloud storage is like having a virtual hard drive that you can access from wherever you want, whenever you want.  The word “cloud” is thrown around a lot when it comes to tech, so it’s easy to confuse cloud storage with other types of cloud-based technology. Let’s take a look at some of the differences to help you understand further.

Cloud Storage vs Cloud Computing

Cloud storage can sometimes be confused with cloud computing, but these are two very different things.

As we have already seen, cloud storage allows you to upload your files to remote servers. Cloud computing is different: it allows you to access computing power or software remotely. 

Cloud storage allows you to access a remote hard drive as if it were your own, and it is entirely focused on storage. In comparison, cloud computing allows you to access the whole computer to run software, make use of the processing power and (indeed) store files.

One of the most common uses of cloud computing is Software-as-a-Service, or SaaS. Instead of installing software on your own computer, you can install and access it remotely. This means you don’t need to worry about whether you have enough hard drive space or your computer is powerful enough, but it still feels like the software is running on your computer, regardless.

Cloud Storage vs Online Backup

Online backup is also often confused with cloud storage. These concepts are more similar, but there are some important differences to consider.

Both involve storing your files in the “cloud” on remote servers. However, the biggest difference between them is that storage in the cloud is intended to act like a virtual hard drive. In contrast, online backup is intended to replicate the contents of your whole computer. The purpose of this is to provide you with a way to recover your data if it is lost or destroyed.

Obviously, if you have files in cloud storage, you can retrieve these if you have a problem later, such as a hard drive failure. However, most cloud storage services don’t replicate your file structure. Online backup copies everything exactly as it is, so it’s simple to restore things back to exactly how they were if something goes wrong.

Online-backup services also offer more protection against data loss, with long-term storage services, offered by platforms like Acronis, allowing you to archive your files for recovery at a later date.

You can learn more about the difference between online storage vs online backup to help you learn more. Alternatively, you can explore our list of the best online backup services for recommendations. 

If you just want to give online backup a try, then there are plenty of free cloud backup options — like IDrive and Jottacloud — available, too.

Benefits of Using Cloud Storage

Cloud storage services are hugely popular. That’s because they offer a number of benefits that make the cost more than worth it. 

Drew Houston, the founder of Dropbox, famously said that he came up with the idea for what would become one of the most popular cloud storage services when he realized he’d forgotten his USB thumb drive. Cloud storage gives you flexibility; you don’t need to have your data storage nearby because services like Dropbox and Google Drive are always available.

With cloud storage, you can access your files anywhere where you can get an internet connection. You could be in the middle of the desert, but if you can get a signal, you can get to your files, and that’s the biggest benefit of storage services like these.

Cloud storage also solves the problem of having low disk space on your PC or mobile device. With video files, applications and even operating systems getting ever larger, it’s all too easy to fill up your super-fast solid state drive. To help deal with this problem, cloud storage allows you to transfer files from your hard drive to the cloud. 

You can still access these files whenever you need them, but they won’t be taking up all of your hard drive space. This also helps deal with another issue; a broken hard drive can result in the loss of all of your data. Photos, documents: all gone.

With cloud storage, even if your hard drive fails, your files are safe and retrievable. You don’t need to worry about data loss, as you can store copies of your important files on your chosen storage service.

Automatic Updates

Another benefit, should you need convincing, is that your files will automatically update across all devices. Make a change to a file on your desktop and the same file on your phone will instantly show those same changes. 

That makes cloud storage incredibly useful when you’re thinking about collaboration. Multiple people can work on files stored in the cloud at the same time and see the changes in real time.

It’s also simple to share files with cloud storage with your friends, family and colleagues. Providers like allow you to send a link to your files, which the recipient can then access from another location. You can set permissions if you want to restrict the ability to edit the files, and even password protect them for extra security.

However, there are some downsides to cloud storage. As you might have guessed, cloud storage generally requires an internet connection to upload your files. If you’re offline, you won’t be able to access your files (except for data stored locally).

Most providers will let you store files both locally and in the cloud, so this shouldn’t be too much of an issue. However, the longer you’re offline, the bigger the difference between your cloud files and local files.

There are also security and privacy issues to consider. Dropbox had a major data breach back in 2012, with 68 million user passwords leaked online. Some providers will also scan your files in order to ensure that you’re not breaching any of their policies.

If you don’t like the idea of this, look for a provider that offers zero-knowledge encryption, which means that your cloud data is stored in encrypted form, and only you (not your provider) holds the key to decrypt them. You can check out our list of the best zero-knowledge cloud storage services to learn more.

Cloud Storage Costs

The final downside to a cloud storage service is that you’ll probably have to pay for it. Most providers do offer free accounts, but you don’t get a huge amount of free storage, and some of the benefits are restricted to paying customers. If you’re curious, our look at some of the best free cloud storage options should help you decide.

For the average user, you’ll need to pay to have enough space for all your files. The good news is that prices are pretty reasonable, and you shouldn’t need to break the bank to store your files, especially against the cost of buying more physical storage. 

If you’re curious, our cloud storage comparison list should help you compare the cost of the main storage cloud providers.


  • Access files anywhere there is internet
  • No need for additional hard drives
  • Recover files in the event of lost data
  • Files update across devices
  • Collaboration
  • Simple sharing


  • Requires an internet connection
  • Privacy and security concerns
  • You need to pay for a decent amount of storage space

Types of Cloud Storage

Not every cloud storage user wants or needs the same things. That’s why there are different types of cloud storage systems available from various providers.


Major cloud storage services allow you to access their remote servers, but you can also set up your own server at home to create your own personal cloud storage

Products such as Western Digital My Cloud allow you to set up a local server that only you can access. There are a number of reasons why you might want to do this. It’s great for streaming media — such as music and movies — within your home because you can rely on faster speeds on your home network than you might get streaming from a server over the internet.

It also means that, if your media content is from less-than-reputable sources, you don’t have to worry about your cloud storage provider snooping around and scanning your files.


Private cloud storage is basically personal cloud storage for businesses. This is where a business sets up its own in-house storage servers. Employees can access those servers through the cloud, like a corporate Dropbox.

There are a number of reasons a business may choose to build their own private cloud storage, but one of the most important is that some businesses are required to store user data on site for legal reasons.


This is what people usually mean when they talk about cloud storage. Services like Google Drive and pCloud have whole racks of servers in data centers dedicated to serving the public, allowing those users to store their files in the cloud. 

Our site is mostly devoted to public cloud storage providers, including services such as, which — as our review shows — is our number-one choice for public cloud storage, although pCloud holds a worthy second place (see our pCloud review for more).

However, alternatives are available. Privacy-focused users could look into a MEGA subscription (check out our MEGA review) or, if you’re thinking about collaborating on Office files, you could consider using OneDrive instead (see our OneDrive review).

These providers are mostly focused on the personal data storage market, but many cloud storage services also offer plans that businesses can also take advantage of if they want to store data off site. Take a look at our list of the best business cloud storage to learn more.

Hybrid Storage

Take the speed and security of private cloud storage and mix it with the ease-of-use and flexibility of public cloud storage, and congratulations: you’ve discovered hybrid cloud storage, a new approach to storing files online.

Hybrid cloud storage allows you to combine your local storage server with a public cloud storage provider. This lets you choose which data you want to store locally and which files you want to store remotely in the cloud. 

This gives you the best of both worlds and could be a perfect solution for many businesses. Services such as Microsoft Azure allow you to manage your hybrid cloud storage, as our earlier Microsoft Azure review explains.

How Safe Is Cloud Storage?

Antivirus Computer Protection

With data breaches occurring daily, you might be wondering just how safe cloud storage truly is. We’ve already mentioned the Dropbox breach back in 2012 that leaked millions of user passwords, but it’s far from an isolated incident, with celebrities suffering memorable breaches of their iCloud storage.

Is cloud storage safe? Well the short answer is: yes, up to a point. Dropbox has upped its security since the breach, and the iCloud “hacks” were mostly down to poor account management and weak passwords, rather than hacking the service itself.

Most third-party cloud service providers in the market are very secure, but it’s also true that if someone gets access to your password, they can access your account. That’s why you should always use two-factor authentication if the service offers it. 

When you sign in, this 2FA system requires you to enter a code sent to your phone or generated by an authenticator app as a second layer of protection, alongside a strong password that’s difficult to figure out. 

Two-factor authentication also means that, even if someone has your password, they can’t sign in to your account without having your cell phone handy, too.

For the best security, use a provider that offers zero-knowledge encryption so that if the servers themselves are hacked, the attackers could access your encrypted files, but they wouldn’t be able to decrypt them.

Providers such as Tresorit offer zero-knowledge encryption as standard, so be sure to check out our Tresorit review to learn more. For more options, take a look at our most secure cloud storage recommendations, such as pCloud, MEGA and Egnyte Connect.

Final Thoughts

Hopefully, this guide has left you with a greater understanding of how cloud storage works and has given you a few recommendations of providers you can try at little to no cost.

Cloud storage has become hugely popular precisely because of its ease of use, low cost and overall convenience. It allows you to access your files and folders whenever you want, from wherever you want, while also keeping them protected against data loss. You’re also reducing the amount of disk space you’re using, freeing up room for videos, games and more instead.

Sign up for our newsletter
to get the latest on new releases and more.

If you have a favorite cloud storage provider, or you have your own tips and recommendations to help other readers looking into cloud storage, then be sure to leave a comment below. As always, thanks for reading.