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According to NIST 12, cloud computing exhibits its own essential characteristics such as; on-demand service, wide network approach, resource pooling, fast elasticity and measured service which demonstrate their relation to and differences from traditional computing approaches.

Cloud computing focuses on IT services which are driven by users’ requests. It provides a means of delivering computing services that make the underlying technology, beyond the user device almost invisible. Applying computing resources on-demand is one of the most desired capabilities for a large number of enterprises because it removes the need for scheduling ahead, purchasing, and installing the resources they will require at some point in the future. This allows the customer to avoid making a needless upfront investment in servers and computing resources. Furthermore, when comparing cloud computing with the traditional model of owning the servers, cloud computing will help to avoid the costs of having underused resources. Consequences of this feature of on-demand computing resources are a lowering of the entry barriers to some business models, as software vendors can develop applications without worrying beforehand of provisioning for a specific number of customers and then bear with the risk of greater success than planned, lead to the service not being available or worse, having very few users and a large capital expense caused by purchasing resources that are very underutilized.

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Another new aspect of cloud computing is the application of usage-based billing model. Customers simply pay for the services they used, while providers bear the costs of hardware and software provision. Pricing may differ based on the time of day due to peaks in the request or varying electricity costs and organizations may, therefore, carry out certain activities when costs are cheaper. However, distributed cloud networks may enable providers to smooth out demand globally and offer uniform pricing strategies not dependent on timing.

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