Cloud computing is a means of providing services or applications to many users via a remote connection. Depending on the application and the expected number of users, cloud computing infrastructure can mean anything from a single Microsoft Sharepoint server to a cluster containing thousands of servers for application providers like Google, Salesforce.com, Amazon or Yahoo.
The concept of cloud computing is fairly simple: build and maintain one pool of resources and make it available to users everywhere via a standard Web browser. There could be one centralized resource pool to manage and maintain, or, to guarantee high QoS during peak demands, there could be multiple resources in different locations connected together via high bandwidth connections.
Cloud computing is emerging as a strategic model for large IT organizations to outsource some of their IT needs and also to gain access to needed resources in peak demand, but the data center that supports the cloud can deliver poor results unless it is optimized for performance, efficiency, scalability and robust QoS.

The Efficient Data Center Initiative provides best practices for an optimized cloud computing data center:
Performance - Create a balanced data center with appropriate processing power, connectivity bandwidth, and storage performance to eliminate bottlenecks. Elements include:
Efficiency - Minimize CapEx and OpEx by using less equipment, management costs, and lower power consumption
Security - Protection of the cloud resources, the transmission media connecting them to end users and the between the users application in the cloud.
Quality of Service and Service Level Agreements - Cloud computing will fail as a model unless the cloud can deliver acceptable quality of service and adhere strictly to service level agreements. To maintain high quality of service, data centers should adopt the following elements: