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Cloud Computing is, to use yet another cloud-inspired pun, a nebulously defined term. However, it was arguably first popularized in 2006 by Amazon's Elastic Compute Cloud (or EC2, see http://www.amazon.com/ec2/), which started offering virtual machines (VMs) for $0.10/hour using both a simple web interface and a programmer friendly API. Although not the first to propose a utility computing model, Amazon EC2 contributed to popularizing the "Infrastructure as a Service" (IaaS) paradigm, which became closely tied to the notion of Cloud Computing.
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