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Google has a service that allows you to create Virtual Machine on his Cloud. There are many Virtual Machine Types like Browsers (StackBrowsers), Mobile Phone, Operating Systems. You can use the Cloud to compute experiments that would have been impossible.

What is a server, network and storage visualization ?

Is there something that Cloud Virtual Machines can do more than the Normal Virtual Machines ?

Would Cloud VMs allow more customization ?

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I never used a Cloud VM. Normal VM are enough to make the work done.

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I'm no expert, but for me, Cloud is a buzzword. Most companies just use the word "cloud" for any Internet services, even though they don't have any cloud infrastructure, or they have it, but it's actually another service over the basic service you're paying for. A VM is a VM. The advantage of having a VM in the Cloud is that you can have "clones" all over the world, which means faster access for clients based on their location, plus another layer of protection in case of disasters. To put it roughly "the cloud" is a more advanced clustering system.

So, in a way, Cloud VMs do offer more customization, but unless you have a complex system, they won't give you any advantage.

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Having machines in the cloud means that you can have a few extra machines on peak times, and then throw them away again when you no longer need them.

This will save in cost compared to needing more machines and then having them on premise, having to maintain them, while you don't normally need them at all.

The other advantage is also that it becomes very easy to test/try out different setups. Want SQL2008 with Windows 2012? No problem. Wait, lets try SQL2012 instead, or maybe see how things work with an Oracle machine.

So all in all it completely depends on what you want from your environment that counts towards the decision to go cloud or not, but cost saving is one of the bigger arguments in some situations.