Cloud computing is the delivery of computing resources, including servers, storage, databases, and software, on demand over the internet, with users paying for what they consume rather than owning the underlying hardware. The canonical definition comes from the U.S. National Institute of Standards and Technology in Special Publication 800-145, “The NIST Definition of Cloud Computing.”
NIST defines cloud computing as “a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.” The document identifies five essential characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service.
NIST also names three service models, Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS), and four deployment models. These distinctions separate the layer at which a provider hands off control, from raw rentable machines up through fully managed applications.
The central economic shift of cloud computing is from capital expense to operating expense. Instead of buying and maintaining hardware that must be sized for peak demand, an organization rents capacity that can be provisioned and released as needs change. This model was made concrete at scale by Amazon Web Services in 2006 and has since become the default way new software is built and run.