According to NIST, “cloud computing is a model for enabling ubiquitous, convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction (NIST, 2011).
The traditional approach incur a huge capital expenditure upfront along with too much excess capacity not allowing to predict the capacity based on the market demand. The Cloud Computing approach has the ability to provision computing capabilities without requiring the human interaction with the service provider. In addition to that, its ability to have a broad network access, resource pooling, elasticity and measured services are a few of the characteristics, which basically overpower the traditional hardware approach. As benefits, it can drastically cut down the procurement lead time, can produce better scalability, substantial cost savings (no capital cost, pay for what you use) with less management headaches in terms of operational costs.