What are Compute Cycles [FAQ]

As cloud hosting is only charged on a per-use basis it is to define units of all the resources that are used by a site. Bandwidth, disk space etc are all familiar but there is also a charge levied for the processing (ie CPU + RAM).
Providers have different methods for splitting and charging for processing power. Amazon Web Services and Windows Azure break out a server into a hourly usage and charge based on the time a server of a defined specification is used.
RackSpace Cloud has a different approach and breaks processing time into Compute Cycles and 10,000 compute cycles are what a 2.8Ghz processor with approx 4GB RAM would consume under moderate load for one month.