Diffusion of Cloud Computing in Education, Potentials, Hype and Impact Sabit Rahim*’***, Prof. Sun Tie*, Afsana Begum**, Gul Jabeen*** and Gul Sahar*** *School of Automation and Electrical Engineering, University of Science and Technology Beijing, 100083, China E-mail: sabit.rahim@kiu.edu.pk/ suntie1605@163.com **School of Mathematics, Dalian University of Technology, Dalian, 116024, China *** Department of Computer Science, Karakoram International University Gilgit, 15100, Pakistan Abstract The current advancement of technology, demand of 21st education and world’s economic downturn condition put many developing as well as developed countries to think a cost effective and dynamic solution for business specially and education particularly. In this research, the authors focus on cloud computing, federated cloud and its critical factors for primary and secondary education system for developing countries. The authors also discuss free and open sources software and open educational resources integration in cloud computing and point out the potentials and future of cloud computing with FOSS, and OER in education. Keywords: Cloud computing, Customization, SaaS; PaaS, IaaS, virtulization, interagtion. 1. Introduction In the 21 st century computing is going to develop very fast and many emerging paradigms came into exist. Cloud computing is one of them. Cloud is all in one as it is a nutshell, because, cloud computing is a ubiquitous, on demand and suitable technology to share pool of configurable resources (e.g. services, applications, networks, storage, CPU processing and many other resource)[1]. The heavy weight applications from cloud can be accessed via portable machines (e.g. Laptops, tablets, PDAs, mobile Phone and PCs)[2], because, it has moved data away from portable and desktop PCs into a location where huge data centers have been established for saving cost and emerging agility[3].Reliability and inter portability are key concerns of cloud computing, because, it deals different services from different cloud providers with a robust interface [4]. Cloud computing also provides all kinds of scalable services, tools, channels, social support, applications, and distributed resources for effective and efficient use for knowledge acquisition and share information with other users. These all because of maturity of web applications, interoperability of computing system, and advance in computing network[5]. The cloud based applications and services are available online in different ways such as web mailing system, storing personal information online, online applications, online backup and drives for saving video, audio and text files[6]. There are some critical factors of cloud computing such as security, investments, infrastructure, reduce cost and complexity of organizations, effective and efficient computing with memory, bandwidth, centralized storage system, power consumption and processing[7]. In market huge number of cloud computing providers for