Cloud hosting refers primarily to the use of virtual hardware, network, storage and composite solutions from a cloud vendor. It is enabled through virtualization, whereby the entire computing capacity of an infrastructure or data center is distributed and delivered to multiple users simultaneously. The user uses underlying infrastructure to host its own applications, services and data. For example, a physical server can be virtualized and consolidated to host several cloud servers, all sharing the processor, memory, storage, network and other resources.

Rather than being hosted on one single instances of a physical server, hosting is delivered on a virtual partition which draws its resource, such as disk space, from an extensive network of underlying physical servers. If one server goes offline it will have no effect on availability, as the virtual servers will continue to pull resource from the remaining network of servers.