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Cloud computing has emerged as one of the most highly discussed topics both in the academic community and in the computing industry. While most of the work that has been conducted to explore this field focuses either on establishing the basis for cloud computing or almost exclusively on the issues surrounding security and data privacy, this paper takes the first exploratory step into exploring the actual internal working of cloud computing and demonstrates its viability for organizations, more specifically educational establishments . The paper starts by introducing the most important key clouds computing concepts, including virtualization technologies, Web services and Service Oriented Architectures (SOA), and distributed computing. Light will be then shed on the impact and potential benefits of cloud computing on teaching and learning in educational institutions. The paper closes by describing building a private cloud inside educational institution and highlights its offerings for students, staff and lecturers.