Cloud computing employs visualization of computing resources to run numerous standardized virtual servers on the same physical machine. Cloud providers achieve with this economies of scale, which permit low prices and billing based on small time intervals, e.g. hourly.

This standardization makes it an elastic and highly available option for computing needs. The availability is not obtained by spending resources to guarantee reliability of a single instance but by their interchangeability and a limitless pool of replacements. This impacts design decisions and requires to deal with instance failure gracefully

The implications for an IT project or company using cloud computing are significant and change the traditional approach to planning and utilization of resources. Firstly, resource planning becomes less important. It is required for costing scenarios to establish the viability of a project or product. However, deploying and removing resources automatically based on demand needs to be focused on to be successful. Vertical and horizontal scaling becomes viable once a resource becomes easily deployable.

Horizontal scaling refers to the ability to replace a single small computing resource with a bigger one to account for increased demand. Cloud computing supports this by making various resource types available to switch between them. This also works in the opposite direction, i.e. to switch to a smaller and cheaper instance type when demand decreases. Since cloud resources are commonly paid on a usage basis no sunk cost or capital expenditures are blocking fast decision making and adaptation. Demand is difficult to anticipate despite planning efforts and naturally results in most traditional projects in over- or under-provision resources. Therefore, traditional projects tend to waste money or provide poor outcomes.