The National Institute of Standards and Technology (NIST) has defined cloud computing as a pay-per-use model for enabling convenient, available, on-demand network access to a shared pool of configurable computing resources (networks/servers/storage/services/applications) that can be rapidly provisioned and released with minimal management effort or service provider interaction.

This means that you are going to use the technology when you need it and for as long as you need it, and you pay only for that usage. There is no need to install any software at your end, and you don't need to pay when you are not using the service.

If a cloud infrastructure is set up within an organization's network boundaries, it is termed an internal cloud, and if it is set up outside an organization's network and accessed through the internet on the organization's network, it is termed an external cloud.