The cloud has become a major computing buzzword in the past five years, but when you strip away the jargon the concept is a simple one. Computing resources and IT solutions can be situated in-house, or they can live on servers and users can connect to them via the internet. The latter is the cloud.
In a sense, then, the cloud is simply a return to an older model of computing, where resources are located off-site. What makes it different from the mainframe model of the past is that the internet has increased the power available to end users, and has opened up availability.