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Cloud computing supplies configurable computation resources through a computer network, drawing on a shared pool that users can obtain and release with little provider intervention. The NIST definition distinguishes five characteristics: on-demand self-service, broad network access, resource pooling, rapid elasticity, and measured service. Together these describe how capacity is requested, shared, scaled and accounted for.^[ref]

For example, a group running a numerical simulation can request several virtual machines, execute independent runs, save the results and release the virtual machines. Rapid elasticity concerns changing allocated capacity as demand changes; measured service records usage such as processor time or storage. A physically distributed system can have a single operator: physical distribution and administrative control answer different questions.

Multi-tenancy lets distinct consumers share a software service or computing infrastructure while retaining separate data and permitted operations. A tenant is the consumer or administrative grouping treated as one isolated customer. Resource pooling commonly assigns shared physical resources dynamically among tenants.^[ref]

For example, two laboratories can use one hosted database application. Each laboratory's users must access only their permitted records, even when both laboratories' records occupy the same database relation. Checks on each database query and limits on resource use serve different purposes: data isolation does not prevent one tenant's expensive work from delaying another. Separate virtual machines are one possible implementation boundary, rather than a requirement of multi-tenancy.

Peter Mell coauthored The NIST Definition of Cloud Computing by Peter Mell and Timothy Grance in 2011. The publication identifies on-demand self-service, broad network access, resource pooling, rapid elasticity and measured service as essential characteristics.^[ref]

The classification separates what service a consumer controls from how it is deployed. Infrastructure, platform and software services expose different management boundaries, while public, private, community and hybrid deployments describe organizational arrangements. A service can therefore be publicly accessible without giving its consumers control of the underlying operating systems.

Resource pooling combines provider computing resources to serve multiple consumers, with physical and virtual resources assigned and reassigned according to demand. NIST emphasizes multi-tenant service and some location independence: consumers generally select an abstraction or broad location requirement rather than one permanently assigned physical server.^[ref]

Pooling can improve utilization when consumers' peak demands occur at different times. It also requires isolation and allocation controls so that one consumer cannot read another's data or monopolize all capacity. For example, virtual machines may share a physical host while retaining separate address spaces. The resource pool and the mechanism enforcing its boundaries are distinct design responsibilities.

Timothy Grance coauthored the 2011 NIST definition of cloud computing with Peter Mell. It specifies five essential characteristics, service models and deployment models rather than equating every remotely accessed computer with a cloud.^[ref]

For example, rapid elasticity concerns provisioning and releasing capacity as demand changes; it is distinct from resource pooling, which concerns sharing provider resources among consumers. A manually provisioned remote server can lack the on-demand and elasticity characteristics. Separating these properties makes system descriptions more informative than simply attaching a cloud label.