To create a cloud computing environment, an organization typically builds off of its existing virtualized infrastructure, using a well-established hypervisor such as VMware vSphere, Microsoft Hyper-V or KVM. But cloud computing goes beyond just virtualization. A public or private cloud also provides a high level of provisioning and lifecycle automation, user self-service, cost reporting and billing, orchestration and other features.

When an organization installs OpenStack software on top of its virtualized environment, this forms a "cloud operating system" that can organize, provision and manage large pools of heterogeneous compute, storage and network resources. While an IT administrator is typically called on to provision and manage resources in a more traditional virtualized environment, OpenStack enables individual users to provision resources through management dashboards and the OpenStack application programming interface (API).