Cloud computing is what we do when we eschew client-based programs/applications (something that physically resides on your computer) for internet-based programs/applications (something that resides on the internet - the cloud - and is accessed through network connectivity and a browser).
A good example of a client-based program would be the Microsoft Office suite of tools for word processing, building presentations, and spreadsheets. A cloud version of the Microsoft tools would be Google Docs or Zoho. The difference between the Microsoft tools and the Google Docs and Zoho tools is that to use the Microsft tools you have to buy and install software on your computer, while the only thing you need for Google Docs or Zoho is an account, a browser and access to the internet.
The main benefit of cloud computing is that as long as you have network connectivity and a browser you have access to your stuff (files, pictures, etc.). What I have found to be the biggest detractor of cloud computing is that the robustness of many of the applications has not yet reached that of their client-based brethren. Additionally, there is a hesitation with the cloud because you lose some control of your data - if the cloud goes down, you lose your stuff.
The trend is toward the cloud. I have been migrating to the cloud for the past couple of years and have had a good experience with it. The level of freedom and flexibility the cloud provides is powerful.
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