While cloud computing has moved to the forefront of strategic IT initiatives in recent years, only a few articles have focused on the basic fundamentals, and none have been written with the practitioner in mind. This article presents a basic, yet comprehensive discussion on what cloud computing is, and how it works. The article identifies and describes the core concepts that an IT manager should know about cloud computing, and provides simple explanations for how the fundamental methods of cloud are used and their impacts upon business processes. This article divides the technology of cloud computing into four distinct categories: service models, delivery architecture models, virtualization and performance. We describe three service models of SaaS, PaaS and IaaS, three architecture models of public, private and hybrid cloud, explain how virtualization technology works, and discuss the current trends in performance factors of HA, FT, scalability, optimization, control and management.