What does the term 'elasticity' in cloud computing refer to?

The concept of 'elasticity' in cloud computing primarily refers to the ability to scale resources up or down as needed. This feature allows organizations to dynamically adjust their resource allocation depending on current demands. For instance, during peak usage times, additional computing resources can be automatically provisioned to handle increased load. Conversely, during times of low demand, those resources can be reduced to minimize costs. This flexibility is one of the key advantages of cloud computing, enabling businesses to respond efficiently to varying workloads.

In contrast, fixed capacity of resources implies a static allocation that doesn’t change based on demand and does not embody the essential quality of elasticity. Creating permanent data backups relates to data storage and management rather than the flexible allocation of computing resources. Connecting to a dedicated server focuses on a specific type of computing resource that does not capture the adaptable nature defined by elasticity. Thus, the ability to adjust resources in real-time is what fundamentally defines the term 'elasticity' in this context.