This chapter explains how software enables a set of servers to be used in an entirely new way. It describes the key concept of elastic computing and explains how virtualization enables cloud owners to scale services quickly and efficiently. The chapter also describes business models used in the cloud industry, including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), Software as a Service (SaaS), and the special case of Desktop as a Service (DaaS). The next chapters continue the discussion by describing the rise of public cloud computing companies that offer elastic computing facilities commercially and explaining the underlying technologies that enable elastic computing as well as the software facilities used to deploy and manage cloud systems.