cloud com·put·ing noun: the practice of using a network of remote servers hosted on the Internet to store, manage, and process data, rather than a local server or a personal computer.

How does the cloud work?
(How does cloud computing work?)

It is important to know how the cloud works so you are buying the correct services for your needs and not making false assumptions, which is common.

A traditional server consists of an operating system running on a piece of dedicated hardware. In the cloud or virtualization world the operating system is no longer restricted to one piece of hardware. It is distributing computing. Virtualization Software (such as, VMware, Hyper-V, Xen, OpenStack, etc.) is driving technology behind the cloud movement. Virtualization software gives you/users the ability to run a server operating system (Windows, Linux, etc) in the same way you would on dedicated server but with much more flexibility and IT features.

Meaning, when you log-in as the server administrator there is no difference in the functionality of the server operating system. The difference is the physical computer that server operating system is running on is now virtualized. Think of virtualization as distributing computing. Meaning, the CPU and Ram could on one or many physical servers and the disc space could be a different storage system. All this gives you more flexibility and functionality. You also need to be an educated buyer so you know what you are getting and not getting. DON’T ASSUME ANYTHING.