What is Cloud Computing?

In simple terms, Cloud computing is an advanced version of grid computing and works on the principle of shared computing resources.  

In cloud computing, the word ‘cloud’ stands for the internet. Therefore, cloud computing is a kind of computing technology aided by the internet. Cloud computing enables the delivery of various services such as servers, storage and applications to users through the internet. Cloud computing relies on sharing of resources to achieve coherence and economies of scale. At the foundation of cloud computing is the broader concept of converged infrastructure and shared services. It 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. With cloud computing, multiple users can access a single server to retrieve and update their data without purchasing licenses for different applications.

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(source: Wikipedia)