Cloud Hosting combines the strength of distributed computing and virtualization technologies. Hence there is an important impact on provisioning where in there is easy scalability of the IT infrastructure and due to shared resources the cost of owning the infrastructure is less because of virtualization as well as the pay as you go model.

• Also the IT costs are further reduced in the cloud hosting process due to the IT support being outsourced to third party.

• Then there is the assurance of uninterrupted and trouble free service due to redundant technology infrastructure

• Lastly, enterprises would be able to use the services and latest technology without actually owning the resources and be able to compete with the firms which can invest heavily in the latest technology. Cloud hosting thus transforms “capital costs” into “operational costs”.