In the most simple terms, cloud computing simply means your applications and data are stored 'somewhere' and you access them across the internet, usually either through your web browser or some proprietary client software such as Microsoft Remote Desktop Client or Citrix ICA client. Think Google Apps or Hotmail. There are no costly and noisy servers in the corner of your office any more.You access your data from anywhere using pretty much any internet-enabled device.
There. That wasn't difficult now was it?
The true definition of cloud adds that this data could be anywhere and could be moved as resource requirements and other factors change. You don't have to go out buying lots of server hardware - usually more than you actually need, 'just in case'. Capacity becomes virtually a non-issue. If you need a bit more computing power because you have some big project to finish, you add more capacity. You need a bit less because you consolidated a couple of branch offices into one, you reduce your requirements. All that changes is the monthly cost.
The sticking point for a lot of people is "where is my data held?". Traditionally you have that big server box in the corner of the office that hums away producing heat. This box holds all your data and you can hug it every day, safe in the knowledge that it loves you as much as you love it and it would never hurt your company's data. You know where your files are and are sure you have the right levels of security in place to keep it safe. People are scared of moving their data out of the office into the data centre, and even moreso, sending it offshore.
Is this a reasonable concern? Well of course your data is the lifeblood of your business. If your CRM goes missing, how do you contact your clients? But so long as you can access that data and so long as you have safeguards in place to protect it, should you be concerned? No, of course you shouldn't! Think about your bank. They hold all of their (meaning 'your') data 'somewhere'. Do you know where? No. Do you care? Well so long as you can get a $50 out of the nearest ATM and pay your bills online, then no you shouldn't care. Think of the other large institutions that hold huge amounts of data - financial organisations, insurance companies, governments ... the list goes on. They spread their data and operations all over the world.
You trust them to do the right thing and protect your information, as their customer. So if it is good enough for you as a customer, then surely it is good enough for your customers?
