Cloud computing builds on technologies like service-oriented architecture, grid computing, and virtualization. It offers on-demand, pay-as-you-use computing resources through virtual machines that provide flexibility, reliability, and agility. Virtual machines enable organizations to easily manage computing resources and services through mechanisms like on-demand cloning and live migration. Virtualization has revolutionized data centers and become an essential technology for cloud computing environments by virtualizing computing resources like storage, processing power, memory, and networks.