CloudInit is a package that contains utilities for early initialization of cloud instances. It allows you to customize virtual machines provided by a cloud vendor by modifying the generic OS configuration on boot. You can use CloudInit to set the OS hostname, add custom users, add keys, run custom scripts, and more2. CloudInit is supported by most major Linux and FreeBSD operating systems and works across different cloud platforms3. Sysprep is a tool for Windows operating systems that prepares an installation for cloning, auditing, and customer delivery4.
References: 1: Replacing Nodes in Nutanix Cluster - Nutanix Support & Insights 2: Customize a Linux VM with cloud-init in Azure - Azure Virtual Machines 3: Cloud-Init - The standard for customising cloud instances 4: Sysprep (Generalize) a Windows installation