What is Cloud Computing?

"What's the cloud?" "Where is the cloud?" "Are we in the cloud now?!" These are all questions you've probably heard (and not just from Amy Poehler in Best Buy's Super Bowl ad) or even asked yourself. The term "cloud computing" is everywhere.
In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of your computer's hard drive. The cloud is just a metaphor for the Internet. It goes back to the days of flowcharts and presentations that would represent the gigantic server-farm infrastructure of the Internet as nothing but a puffy, white cumulonimbus cloud, accepting connections and doling out information as it floats.

Cloud computing is the delivery of computing as a service rather than a product, whereby shared resources, software, and information are provided to computers and other devices as a utility (like the electricity grid) over a network (typically the Internet). Clouds can be classified as public, private or hybrid.

Cloud computing relies on sharing of resources to achieve coherence and economies of scale, similar to a utility (like the electricity grid) over a network. At the foundation of cloud computing is the broader concept of converged infrastructure and shared services.

Cloud computing, or in simpler shorthand just "the cloud", also focuses on maximizing the effectiveness of the shared resources. Cloud resources are usually not only shared by multiple users but are also dynamically reallocated per demand. This can work for allocating resources to users. For example, a cloud computer facility that serves European users during European business hours with a specific application (e.g., email) may reallocate the same resources to serve North American users during North America's business hours with a different application (e.g., a web server). This approach should maximize the use of computing power thus reducing environmental damage as well since less power, air conditioning, rackspace, etc. are required for a variety of functions. With cloud computing, multiple users can access a single server to retrieve and update their data without purchasing licenses for different applications.
What cloud computing is not about is your hard drive. When you store data on--or run programs from the hard drive, that's called local storage and computing. Everything you need is physically close to you, which means accessing your data is fast and easy (for that one computer, or others on the local network). Working off your hard drive is how the computer industry functioned for decades and some argue it's still superior to cloud computing, for reasons I'll explain shortly.

The cloud is also not about having a dedicated hardware server in residence. Storing data on a home or office network does not count as utilizing the cloud.

For it to be considered "cloud computing," you need to access your data or your programs over the Internet, or at the very least, have that data synchronized with other information over the Net. In a big business, you may know all there is to know about what's on the other side of the connection; as an individual user, you may never have any idea what kind of massive data-processing is happening on the other end. The end result is the same: with an online connection, cloud computing can be done anywhere, anytime.