Cloud Computing is the separation of computer hardware from software. Until now, decisions to build or use software were always closely tied to conversations about hardware: What server should we buy? Who will maintain it? What do we do when the hardware reaches the end of its life? But the various forms of cloud computing rely on virtualizing hardware, which dramatically changes the equation. By putting a virtualization layer between the physical hardware and your code, it becomes possible to define your running environment in software. That changes a computer from a single environment running various programs to an infinitely flexible arrangement of virtual computers, each with its own software, configuration, even operating system.

The cloud leverages virtualisation technology by letting you request “hardware” at a moment’s notice, pay only for the resources used, and delete it when your tasks are complete. It removes the need for month-long procurement cycles, hardware support and maintenance SLA’s, and expensive data centres. The cloud provider takes on all those responsibilities and abstracts it all down to instantly available discrete compute resources, which you rent and use as needed.

Cloud Computing is sold in many forms. Infrastructure as a Service (IaaS) involves the creation of virtual servers, called Compute Instances. The owner of these computer selects an install image, which preloads the desired operating system and a default configuration. The install image may also contain bundled software. Once a compute instance is created, it functions as a co-located server and the configuration and maintenance of the software and OS is the customer’s responsibility.

Platform as a Service (PaaS) goes a step further than IaaS: Rather than renting a virtual server, the cloud provider sells access to a software platform. This gives the customer access to the software, with no access to the underlying hardware or systems.
Resources can be rented on the Public cloud, or a business can build and operate its own private cloud. Public cloud providers run vast interconnected data centres around the world and sell access to resources within those data centres. But if an enterprise has special security or compliance requirements, or if they need service offerings not provided by any of the public cloud providers, they may choose to build their own data centre and deploy virtualisation technology to build a private cloud. They gain the extra security and flexibility, at the cost of having to maintain the physical hardware and its running environment.

Many public cloud companies, both public (such as Microsoft Azure and Amazon Web) and private (Facebook and others) are known as hyperscalers. This refers both to the enormous scale of their operations and their ability to up- and down-scale resources to almost any extent and do so rapidly without disrupting operations.