Like cyber-space and the virtual-world , the "cloud" is a metaphor. The "cloud" refers to an amorphous place where operations can be performed and data can be stored and accessed via the internet. We are encouraged to think of a vaporous place where data goes and we can get it when we need it. Like the sky and the clouds, the sun, the moon and the stars, we don't need to think about it, it just there.
These metaphors are used to help people understand highly technical concepts but for a lot of us, they make these already mind-bending concepts unnecessarily confusing.
We know that when we create documents or upload pictures we use programs that came with our computer or that we installed on our computer. We also know that when we save stuff (documents, pictures, music) on our computers, it is all stored on our hard drive. If something goes wrong we have disks to reinstall our programs. We also have copies of our data (documents, pictures, music) on CDs, DVDs, thumb drives or other backup media so we don't loose everything.
Some of us upload our photos to a website like Flickr where we can access them and also share them. When we use a website like Flickr, we are saving our data (our photos) on some server somewhere in the world. Like the sky and the clouds, we don't have to think about where, we just know that Flickr is taking good care of our picture files and when we need them we can access them.
Yahoo and Gmail are companies that also let us store our data online and use their program to access the data. If we use them for our mail server, they store our email for us and give us a nice interface so that when we want to check our email we can. Yahoo and Gmail take very good care of our email and they back it up all the time so if something goes wrong with one of their servers they can just switch over to another one or another one.
For businesses with lots of data and lots of transactions to make, it is becoming more and more attractive to store this data and perform these transactions on the internet rather than having to keep their own servers and drive and backups. The overall cost of using another company to perform these functions can be big but is often cheaper than doing it themselves on site.
I once worked for a company where an extra backup tape that was made every evening was taken home by one of the administrators so that if something happened at the building, the data would be safe. We didn't, however, have a backup system of servers at another location. That would have been prohibitively costly. We had a narrow escape one summer when a huge storm passed by while the roof was being redone. The tarps that were to keep out the rain were not sufficient. We arrived at work the next day to find the place flooded. Luckily, the room where the servers were kept was not affected. Phew!
Even with a good backup, if the system of servers itself goes down, you're sunk if you haven't got another system. This is not so crucial for individual users. It is relatively easy to buy a new computer, hook it up, reinstall the software programs and move the data file off the backup media and onto the new computer. No so for a business. Getting a system back up and running can take days and can cost a business lost accounts or missed opportunities.
"Cloud" computing is designed to take away a lot of the headaches of running businesses and storing data. New "cloud" companies are offering businesses the ability to run their business and store their data "in the cloud", that is on "cloud" servers. The cloud companies take care of the system, the data backups and security at least to a point. It will still be necessary to have security in place on-site just as Flickr users still need to concern themselves with the security of the own computer (or smartphone).
According to Microsoft and the gurus out in the cyber world, the Cloud is the future.
There are all kinds of issues around "Cloud" computing. Making sure your cloud company is reliable and that your data is really secure is an issue. Do quick Google search of "Cloud issues" and you will come up with lots of information to learn more about the future.