The following video provides an excellent, and mostly understandable, explanation of what the cloud part of cloud computing is all about.
Wikipedia, the online encyclopedia, says, "Cloud computing is a marketing term" and compares it to buying electricity. In this analogy, users can simply use electricity. They do not need to create it or transport it or get involved in how it is generated at all. Electricity consumers get a bill at the end of each month for the amount of electricity they consumed. Simple.
The concept of cloud computing is a similar process. The cloud user connects their personal computer or even a smimpler netbook to the cloud and then simply uses storage, computing power, development environments, and applications (programs) without having to worry about servers or processor speed or memory or backups or all the other things we generally have to consider when we keep our informating and processing on our own computer. Cloud computing is really just a term for Internet-based computing. It is the result of the development and use of computer technology through the Internet. The term "cloud" is simply a metaphor for "Internet based" and comes from the way we originally presented the internet in computer network diagrams.
In escense the cloud is an abstraction hiding the complex infrastructure of the internet and is a style of computing in which IT-related capabilities are provided as a service rather than a product for you to own yourself. This allow users (you!) to access technology-enabled services from the Internet; we say "from the cloud", without needing any knowledge of, or control over, the technologies behind these servers.
You don't need a word processor to create text-based documents. You don't need a spreadsheet or an accounting program to handle financial information. You don't need a mail reader to read your mail. You don't need... well, pretty much all you do need is a computer and a web browser to access the internet. Everything else is held and/or transacted (processed) in the cloud. You don't even really need a full computer with a hard drive anymore. A netbook is a simple access device that looks a little like a "computer" but doesn't really computer. It simply runs an internal program that connects to the Internet and provides an interface to the cloud.
Clound computing is a growing concept that, thanks to the current state of technology and the ultra-low price of centralized data storage and processing power, is turning out to be a great idea that is actually in use and working.
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