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Third-party cloud computing represents the promise of out-sourcing as applied to computation. Services, such as Microsoft's Azure and Amazon's EC2, allow users to instantiate Virtual Machines (VMs) on demand and thus purchase precisely the capacity they require when they require it. In turn, the use of virtualization allows third-party cloud providers to maximize the utilization of their sunken capital costs by multiplexing many customer VMs across a shared physical infrastructure.
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