According to Wikipedia "Cloud computing refers to the provision of computational resources on demand via a computer network. In the traditional model of computing, both data and software are fully contained on the user's computer; in cloud computing, the user's computer may contain almost no software or data (perhaps a minimal operating system and web browser only), serving as little more than a display terminal for processes occurring on a network of computers far away. A common shorthand for a provider's cloud computing service (or even an aggregation of all existing cloud services) is "The Cloud".
The most common analogy to explain cloud computing is that of public utilities such as electricity, gas, and water. Just as centralized and standardized utilities free individuals from the vagaries of generating their own electricity or pumping their own water, cloud computing frees the user from having to deal with the physical, hardware aspects of a computer or the more mundane software maintenance tasks of possessing a physical computer in their home or office. Instead, they use a share of a vast network of computers, reaping economies of scale.
The phrase “cloud computing” originated from the cloud symbol that is usually used by flow charts and diagrams to symbolize the internet. The principle behind the cloud is that any computer connected to the internet is connected to the same pool of computing power, applications, and files. Users can store and access their own personal files such as music, pictures, videos, and bookmarks or play games or use productivity applications on a remote server rather than physically carrying around a storage medium such as a DVD or thumb drive. Almost all users of the internet may be using a form of cloud computing though few realize it. Those who use web-based email such as Gmail or Hotmail instead of receiving mail on their computer with Outlook or Entourage are the most common examples of such users."
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