Cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure in the "cloud" that supports them.

The concept generally incorporates combinations of the following:

Infrastructure as a service (IaaS)
Platform as a service (PaaS)
Software as a service (SaaS)

Cloud computing customers do not generally own the physical infrastructure serving as host to the software platform in question. Instead, they avoid capital expenditure by renting usage from a third-party provider. They consume resources as a service and pay only for resources that they use. Many cloud-computing offerings employ the utility computing model, which is analogous to how traditional utility services (such as electricity) are consumed, while others bill on a subscription basis.

Sharing "perishable and intangible" computing power among multiple tenants can improve utilization rates, as servers are not unnecessarily left idle (which can reduce costs significantly while increasing the speed of application development). A side effect of this approach is that overall computer usage rises dramatically, as customers do not have to engineer for peak load limits. Additionally, "increased high-speed bandwidth" makes it possible to receive the same response times from centralized infrastructure at other sites.