I recently came across this video, which helped me understand the basics of how Openstack does what it does:

I really love the idea of OpenStack – an open-source cloud platform that’s fast becoming the industry standard, and displacing the proprietary cloud standards in the market – but the underlying technology is not simple, and seems to involve a steep learning curve.

OpenStack started out as a joint project between NASA and Rackspace, combining elements from an older NASA platform called Nebula and Rackspace’s existing Cloud Files service. The idea was to make an open source platform available to install on consumer hardware, thereby bringing the cost of offering cloud-computing services considerably. OpenStack has already been embraced by Ubuntu and Fedora, making it simpler to deploy a series of servers quickly and (relatively) cheaply.

There’s a great piece in the OpenStack FAQ to explain what it’s about:

How do you describe OpenStack to your parents?

This is a great question because I have been in that position before, I like to explain to them with simple examples so that they can correlate with their everyday activities, for instance my father loves to fix almost everything and he waste a lot of time looking for the right tool for the job that he is trying to do, so one day I told him that the Cloud was a toolbox always reachable that will give him the right tool at the moment that he needs it, after a couple of minutes later, he smiled to me and said “When can I have it?”  I just smiled back to him!

More info here: