Eucalyptus is an open source software that implements private and hybrid clouds within an organization's existing IT infrastructure. It includes several components - the Cloud Controller (CLC) that handles user requests and metadata, Walrus for storage, Cluster Controller (CC) for scheduling VM instances, Storage Controller (SC) for block storage, and Node Controller (NC) that executes VM instances. Eucalyptus enables organizations to create private clouds without requiring specialized hardware or retooling their existing IT systems. While flexible and scalable, early versions of Eucalyptus experienced issues with insufficient resources and stability when starting and connecting VM instances.