What is Cloud Networking (and How Does it Work)?

Cloud networking is the backbone of cloud computing. It keeps everything connected and running smoothly when deploying applications or scaling your digital operations.

Before, cloud networking was a nice-to-have, but nowadays, it’s a need-to-have. It opens up a world of possibilities:

  • Take advantage of containerization, serverless computing, and microservices without infrastructure issues

  • Enable your remote workers and global teams to collaborate better and work together

  • Access your work, network, and tools from anywhere in the world at any time

  • Scale up or down depending on your scale, needs, and budgetary constraints

  • Deploy applications faster than ever

Below, we’ll walk you through everything you need to know about cloud networking and how it works for your startup to build for optimal performance.

What is cloud networking?

Cloud networking is the practice of designing, implementing, and managing interconnected network architecture within cloud computing environments. It enables the delivery of network services, resources, and applications from a pool of scalable, virtualized infrastructure accessible over the Internet.

Why is cloud networking important?

Back in the day, networking meant dealing with physical hardware—servers, routers, and switches, all neatly (or not so neatly) racked in a data center. It demanded significant capital investment, not to mention the space and expertise to keep everything humming along.

Then, the cloud came along and changed everything. Cloud networking virtualizes all your resources, making them available on demand without the physical constraints of the past.

While the anatomy of cloud networking can get a little complicated, here are the basic components that make it tick:

  • Virtual networks: Virtual networks direct traffic exactly where it needs to go without the physical limitations of traditional networks.

  • Cloud routers: Cloud routers manage and direct data across the network to ensure it reaches its destination efficiently.

  • Load balancers: Load balancing ensures that no single server gets overwhelmed, distributing incoming requests evenly so everything runs smoothly.

Cloud networking vs. traditional networking models

Traditional networking was about managing a fixed set of resources within physical constraints. Cloud networking, on the other hand, is dynamic, scalable, and accessible from anywhere. It’s about having a global network at your fingertips without worrying about the physical infrastructure.

With cloud networking, you can spin up a virtual network (complete with virtual routers and load balancers) in minutes. This elasticity empowers your business to adapt quickly to changing needs, scaling up during peak times and down when things are quieter, all without the need for physical adjustments.

For example, Snipitz eased their fears of being too successful (yes, that’s a thing) by building with DigitalOcean:

"There became a point where we had revenue coming in, and there was a fear that we couldn’t deliver at scale for a large event, with many concurrent users and more than a single stream per user. CTO.ai came in and saw what our current infrastructure was and highlighted the solutions such as DigitalOcean Kubernetes that could scale up and down automatically."Andrew Lombardi, Snipitz Chief Product Officer

Cloud networking marries the power of traditional networking with the agility and scalability of the cloud. It’s a blend that allows your business the flexibility to innovate and grow in today’s increasingly digital world.

How cloud networking works

Cloud networks are built on distributed data centers, virtualization technology, and software-defined networking (SDN). This structure delivers network services over the Internet to support the dynamic needs of modern applications and workloads.

Data centers are the physical locations where cloud providers house their servers and networking hardware. These facilities are strategically located around the world to ensure performance and redundancy. Cloud networks can come in a few shapes and sizes:

  • Public cloud network: Operated by third-party cloud providers, offering their resources over the internet. They are shared among multiple tenants, providing a cost-effective solution for businesses without needing hardware investment.

  • Private cloud network: Dedicated to a single organization, offering greater control and security. They can be hosted on-premises or by a cloud provider but are not shared with other customers.

  • Hybrid cloud network: Combine elements of both public and private clouds, allowing data and applications to move between the two environments. Hybrid cloud networking offers flexibility and scalability while maintaining control over sensitive workloads.

SDN is a technology that decouples the network control plane (the decision-making component) from the data plane (the part that forwards traffic). This separation allows network administrators to manage network services through software, allowing more agile and automated network management and configuration.

Additionally, there is the aspect of connectivity within cloud networking. This includes technologies like the following:

  • API (application programming interface): Enable communication between different software applications or components within the cloud, facilitating integration and automation.

  • Virtual private cloud (VPC): Provide isolated network environments within the public cloud, allowing businesses to control their network configurations and access policies.

  • Direct connect service: Offer a dedicated network connection between an organization’s on-premises infrastructure and the cloud provider to improve performance and security.

Benefits of cloud networking

Here’s why cloud networking should be an essential part of your growth and IT strategies:

Scalability and flexibility

Businesses can quickly scale their network resources up or down based on demand without significant upfront investments in physical infrastructure. This elasticity supports business growth and seasonal fluctuations to ensure your networking capabilities align with operational needs.

Additionally, cloud networking allows your business to quickly adapt its network configurations, making it easier to explore new markets or adjust to changing business conditions.


Cloud networking introduces a cost-efficient model for managing network resources. The pay-as-you-go pricing structure means your company only pays for the networking resources it uses, eliminating the need for large capital expenditures on hardware and reducing ongoing operational costs.

This model makes it more affordable for your business to access advanced networking capabilities and to better predict and manage your IT budgets.

Performance and reliability

The distributed nature of cloud data centers ensures high performance and reliability for cloud networking services. Cloud providers leverage a global network of data centers to offer low-latency connections and high-speed data transfer rates—enhancing the user experience for applications and services.

Plus, the redundancy built into cloud networks helps you maintain high availability and minimizes the risk of downtime (even in the event of hardware failures or other issues).

Security and compliance

Cloud networking comes with robust security features designed to protect data and applications. Cloud providers invest heavily in security technologies and practices like encryption, intrusion detection systems, and multi-factor authentication to safeguard against threats.

Many cloud networking solutions are designed to meet stringent regulatory and compliance standards. They provide your business with the tools you need to secure sensitive data and comply with industry regulations.

Innovation and agility

The ability to deploy new applications and services quickly (without the constraints of traditional networking infrastructure) empowers your startup to respond rapidly to market opportunities and competitive challenges.

Anticipate a threat or a surge in traffic or usage? Scale accordingly. Notice an opportunity to expand to a new market? Make it happen quickly in the cloud.

Cloud networking supports deploying cutting-edge technologies like artificial intelligence, machine learning, and Internet of Things (IoT) applications to let your company innovate and stay ahead of the curve.

How to optimize your cloud network for optimal performance

Optimizing your cloud network for performance involves balancing efficiency, cost, and performance. It’s all about creating a robust, secure, and fine-tuned infrastructure for peak performance (without exceeding your budget).

Here are some tips and best practices to make it happen:

  1. Determine your workload needs: Begin by understanding the specific needs of your applications and services. Different workloads may require different networking capabilities, such as higher bandwidth or lower latency.

  2. Choose the right cloud service provider: Select cloud services and providers that align with your performance requirements and business goals. Consider factors like cloud architecture, availability zones, and edge locations.

  3. Intentionally design your network: Use virtual private clouds (VPCs) and subnets to segment your cloud network. This can improve security and performance by controlling traffic flow and reducing unnecessary access. Ensure your network routes are optimized for the shortest possible path, reducing latency and improving speed.

  4. Monitor and adjust: Implement cloud monitoring tools to constantly assess network performance. This includes real-time monitoring of traffic, performance metrics, and logs. Plan for scalability by automatically scaling network resources in response to demand. This ensures that performance remains consistent, even during peak times.

  5. Leverage advanced technologies: Use SDN technologies to gain greater control over your network, enabling more precise and dynamic configuration changes. Consider using edge computing services to process data closer to the source, reducing latency for time-sensitive applications.

Get started with cloud networking on DigitalOcean

Cloud networking is the future of digital operations, but it’s not just about reaching the benefits of the cloud—it’s about maximizing performance and optimizing your network infrastructure. And we’re here to help you make it happen.

DigitalOcean provides the cloud networking products and solutions you need to build a robust infrastructure, whether you’re a startup, a growing business, or a large enterprise. Here are just a few:

  • Virtual Private Cloud (VPC): Securely isolate your network environment within the DigitalOcean cloud, allowing you to manage traffic flow between your resources privately and securely without intermingling with other users’ traffic.

  • Load Balancers: Automatically distribute incoming traffic across multiple Droplets to maintain seamless application performance and reliability, supporting HTTP and TCP traffic.

  • Reserved IPs: Easily assign static IP addresses to your Droplets, enabling you to redirect network traffic within the same data center to deliver high availability and failover configurations.

  • Cloud Firewalls: Implement stateful traffic control to your Droplets using DigitalOcean’s Cloud Firewalls, allowing you to define what traffic is allowed to enter and exit your resources.

  • Spaces CDN: A simple, scalable object storage solution with a built-in Content Delivery Network (CDN) that makes storing and serving large amounts of data or media easier.

Find the perfect combination of cloud solutions to meet your company’s unique needs. Get started with DigitalOcean today.


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