Cloud Computing Explained

The idea behind cloud computing is that services, not servers, are offered to the end use. If people need a Web server they buy Web services from “cloud”, and have no idea what is actually offering them the serving. The “cloud” essentially hides the server infrastructure from the client, and ideally scales on the fly and so on. Much of the confusion in terminology happens, because the cloud of services almost always is powered by a grid of computers in the background. Cloud computing itself, however, is just the abstraction of services away from servers themselves.

from Linux journal