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Cloud computing metaphor: the group of networked elements providing services need not be individually addressed or managed by users; instead, the entire provider-managed suite of hardware and software can be thought of as an amorphous cloud.
Since the launch of Amazon EC2 in 2006, the availability of high-capacity networks, low-cost computers and storage devices as well as the widespread adoption of hardware virtualization, service-oriented architecture, and autonomic and utility computing has led to growth in cloud computing.

Cloud computing is an information technology (IT) paradigm that enables ubiquitous access to shared pools of configurable system resources and higher-level services that can be rapidly provisioned with minimal management effort, often over the Internet. Cloud computing relies on sharing of resources to achieve coherence and economies of scale, similar to a public utility.

Third-party clouds enable organizations to focus on their core businesses instead of expending resources on computer infrastructure and maintenance.  Advocates note that cloud computing allows companies to avoid or minimize up-front IT infrastructure costs. Proponents also claim that cloud computing allows enterprises to get their applications up and running faster, with improved manageability and less maintenance, and that it enables IT teams to more rapidly adjust resources to meet fluctuating and unpredictable demand

Cloud providers typically use a "pay-as-you-go" model, which can lead to unexpected operating expenses if administrators are not familiarized with cloud-pricing models

Cloud computing shares characteristics with:

  • Client–server model—Client–server computing refers broadly to any distributed application that distinguishes between service providers (servers) and service requestors (clients). 
  • Computer bureau—A service bureau providing computer services, particularly from the 1960s to 1980s.
  • Grid computing—"A form of distributed and parallel computing, whereby a 'super and virtual computer' is composed of a cluster of networked, loosely coupled computers acting in concert to perform very large tasks."
  • Fog computing—Distributed computing paradigm that provides data, compute, storage and application services closer to the client or near-user edge devices, such as network routers. Furthermore, fog computing handles data at the network level, on smart devices and on the end-user client side (e.g. mobile devices), instead of sending data to a remote location for processing.
  • Mainframe computer—Powerful computers used mainly by large organizations for critical applications, typically bulk data processing such as: census; industry and consumer statistics; police and secret intelligence services; enterprise resource planning; and financial transaction processing.
  • Utility computing—The "packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility, such as electricity." 
  • Peer-to-peer—A distributed architecture without the need for central coordination. Participants are both suppliers and consumers of resources (in contrast to the traditional client–server model).
  • Green computing
  • Cloud sandbox—A live, isolated computer environment in which a program, code or file can run without affecting the application in which it runs.
Characteristics
By mid-2008, Gartner saw an opportunity for cloud computing "to shape the relationship among consumers of IT services, those who use IT services and those who sell them"  and observed that "organizations are switching from company-owned hardware and software assets to per-use service-based models" so that the "projected shift to computing ... will result in dramatic growth in IT products in some areas and significant reductions in other areas."