"Cloud computing" is a buzzword that's tossed around a lot these days to describe the direction in which information infrastructure seems to be moving.
The concept, quite simply, is that vast computing resources will reside somewhere out there in the ether (rather than in your computer room) and we'll connect to them and use them.
Cloud computing users can avoid capital expenditure (CapEx) on hardware, software, and services when they pay a provider only for what they use.
Consumption is billed on a utility (e.g. resources consumed, like electricity) or subscription (e.g. time based, like a newspaper) basis with little or no upfront cost.
Other benefits of this time sharing style approach are low barriers to entry, shared infrastructure and costs, low management overhead, and immediate access to a broad range of applications.
Users can generally terminate the contract at any time.
Google, naturally, is a big promoter of this idea, as its business is already based on owning a massive computer infrastructure (or cloud) that people tap into from their homes or offices.
There's nothing wrong with the idea of cloud computing. In fact, it's sufficiently compelling that in large measure it already exists. My company doesn't own any servers, and for the most part we have only basic productivity software on our personal computers, with everything else off in a cloud.
This is all good from our standpoint; we have no desire to buy and maintain lots of computers and software. If we can let someone else worry about the basic technology, we can focus on the publishing. Any businessperson can see the logic of that.
When Google talks up the benefits of cloud computing, what the company is really saying is, use our cloud rather than the various ones you're using now. Let us host your applications, let us host your website, let us take all those different services you use and simplify them and make them cheaper and better. It's not a bad argument.
Indeed, what's best for the customer in the end is having plenty of choices. Cloud computing can be a great thing, but I hope there continue to be plenty of clouds to choose from.