Wikipedia puts it this way:

Cloud computing is Internet– (“cloud-“) based development and use of computer technology (“computing“).In concept, it is a paradigm shift whereby details are abstracted from the users who no longer need knowledge of, expertise in, or control over the technology infrastructure “in the cloud” that supports them. Cloud computing describes a new supplement, consumption and delivery model for IT services based on Internet, and it typically involves the provision of dynamically scalable and often virtualized resources as a service over the Internet.

The term cloud is used as a metaphor for the Internet, based on the cloud drawing used to depict the Internet in computer network diagrams as an abstraction of the underlying infrastructure it represents. Typical cloud computing providers deliver common business applications online which are accessed from a web browser, while the software and data are stored on servers.

These applications are broadly divided into the following categories: Software as a Service (SaaS), Utility Computing, Web Services, Platform as a Service (PaaS), Managed Service Providers (MSP), Service Commerce, and Internet Integration.

Many non-technical inclined readers will scratch their heads at this explanation as it adds more  confusion to a confusing question.

CLOUD COMPUTING IN SIMPLE TERMS

Cloud computing can be explained simply as the use of a computer service or resource over the internet without bothering to buy or own the resource.

A typical example will be:

Suppose you want to type a letter using Microsoft Word 2007. But you do not have MS-Word 2007 in your computer or do not want the burden of buying, maintaining and installing countless programs in a computer, so you walk into the nearest cyber cafe and go online to a company that offers MS-Word 2007 as a service. You pay a small fee, click on a link and MS-Word 2007 launches direct from the company’s website to your system in the cafe. You simply type your letter, maybe save it on memory stick,  send it as an attachment or print it out.

Now the company offers the MS-Word 2007 as a service to which you have subscribed and the internet is referred to as the cloud. There are various ways of accomplishing this.

These include Software as a Service (SaaS), Utility Computing, Web Services, Platform as a Service(PaaS), Managed Service Providers (MSP), Service Commerce, and Internet Integration.

IBM puts it this way:

An emerging IT delivery model—cloud computing— can significantly reduce IT costs & complexities while improving workload optimization and service delivery. Cloud computing is massively scalable, provides a superior user experience, and is characterized by new, internet-driven economics.

Various Companies are now offering this service. Examples include Microsoft, Yahoo, Google, AT&T, IBM and VMWare etc.

As another example, the email you type and send everyday is an example of cloud computing in operation. You can type and send emails locally from your computer by using Microsoft Outlook, but many people do not even know this. They simply walk into a cafe and call up their mail accounts and type the emails period.

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As the technology ‘wars’ advances. It has been forecasted by Merrill Lynch that by 2011 the volume of cloud computing market opportunity would amount to $160bn, including $95bn in business and productivity apps (email, office, CRM, etc.) and $65bn in online advertising.(According to a post on Markus Klems blog)

The question on everyones lips are: Is cloud computing really the future of computing? Will it succeed where it’s brother the Grid failed?

Only time will tell.