The normal way of setting up Moodle is to install it on a Windows or a Linux server in a data center, and manage it as part of an IT system. The setting up requires large investments in hardware and software. If Moodle is hosted in the Cloud, no big investments are needed.
Take Azure of Microsoft as an example of a platform in the cloud. First, the original Moodle must be converted to operate on Azure. Moodle on Azure, an open source tool, can achieve the conversion automatically, while making minimal alterations to the original Moodle. It is used to migrate locally hosted Moodle to the cloud/Azure environment. The current version of Moodle on Azure, open for public download, is capable of converting original Moodle 2.2. It is composed of patches and support extensions that make Moodle run well on Azure, either as a new installation or as a reinstallation.