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Cloud computing is an information technology (IT) paradigm that enables ubiquitous access to shared pools of configurable system resources and higher-level services that can be rapidly provisioned with minimal management effort, often over the Internet.
Cloud computing relies on sharing of resources to achieve coherence and economy of scale, similar to a utility.
Third-party clouds enable organizations to focus on their core businesses instead of expending resources on computer infrastructure and maintenance.
Advocates note that cloud computing allows companies to avoid or minimize up-front IT infrastructure costs. Proponents also claim that cloud computing allows enterprises to get their applications up and running faster, with improved manageability and less maintenance, and that it enables IT teams to more rapidly adjust resources to meet fluctuating and unpredictable business demand.
Since the launch of Amazon EC2 in 2006, the availability of high-capacity networks, low-cost computers and storage devices as well as the widespread adoption of hardware visualization, service-oriented architecture, and autonomic and utility computing has led to growth in cloud computing.
The goal of cloud computing is to allow users to take benefit from all of these technologies, without the need for deep knowledge about or expertise with each one of them.
The cloud aims to cut costs, and helps the users focus on their core business instead of being impeded by IT obstacles.
The main enabling technology for cloud computing is virtualization. Virtualization software separates a physical computing device into one or more “virtual” devices, each of which can be easily used and managed to perform computing tasks.
With operating system–level virtualization essentially creating a scalable system of multiple independent computing devices, idle computing resources can be allocated and used more efficiently. Virtualization provides the agility required to speed up IT operations, and reduces cost by increasing infrastructure utilization.
Autonomic computing automates the process through which the user can provision resources on-demand. By minimizing user involvement, automation speeds up the process, reduces labor costs and reduces the possibility of human errors. More Info at wikipedia