In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of your computer's hard drive. The cloud is just a metaphor for the Internet. It goes back to the days of flowcharts and presentations that would represent the gigantic server-farm infrastructure of the Internet as nothing but a puffy, white cumulonimbus cloud, accepting connections and doling out information as it floats. 
Cloud Computing is a service that delivers computing resources over a network connection, usually the internet. Cloud computing delivers three types of computing resources, namely hardware, software, and software development framework aka platform.
Cloud Computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction.
This Cloud model promotes availability and is composed of five essential characteristics:
- On-demand self-service
- Broad network access
- Resource pooling
- Rapid elasticity
- Measured Service
Cloud Computing has three service models:
- Cloud Software as a Service (SaaS)
- Cloud Platform as a Service (PaaS)
- Cloud Infrastructure as a Service (IaaS)
Cloud Computing has four deployment models
- Private Cloud
- Community Cloud
- Public Cloud
- Hybrid Cloud
Cloud Computing Models
There are three types of cloud computing models each associated with a specific type of computing resource delivery over a network:
- Infrastructure as a Service (IaaS): Cloud computing model that delivers hardware services over a network
- Software as a Service (SaaS): Cloud Computing model that delivers software over a network
- Platform as a Service (PaaS): Cloud Computing model that delivers software development framework over a network. A platform encompasses the underlying software, and hardware resources on which it is hosted but the user interacts with them only through the development environment interface
Public and Private Cloud Computing Since cloud computing services are delivered over a network, access to the network determines who can use these services.
- Public: the network delivering cloud computing services is available to anybody in the public domain. However, a user must have security credentials required to access the specific cloud computing service before they can use it
- Private: the network delivering cloud computing services is available to only pre-approved users, usually within an organization. A user must still have appropriate security credentials to access the specific cloud computing service before they can use it
The essential element of cloud computing is the delivery of computing resources over a network however, this
- Computing resources are converted from products to services
- Computing resources are rented not owned
Difference Between Product, and Service 
Cloud computing's main contribution has been to convert computing from a product to a service based model which has profound implications for the enterprise. There are five key differences between a product, and a service:
- Products are tangible, services are intangible. This distinction seems to diminish in the digital world so one can change it to mean that products have physical form, and services do not
- Product exist by definition, but a service requires a user interaction to exist. In other words, persistence is an inherent characteristic of a product but not that of a service
- Service quality, therefore, is unpredictable because it varies depending upon user interaction whereas product quality is predictable because it is based upon a manufacturing process. Again, this distinction fades in the digital world because we can deliver stable services
- Service is delivered. Product is manufactured.
- Services are perishable. Products, in general, are not.
- Services follow the "use it or lose it" model
- Products follow a "buy, and keep" model
In real life, most product offerings are a combination of products, and services. There exists a continuum from pure goods to pure services:
Cloud computing, also on-demand computing, is a kind of Internet-based computing that provides shared processing resources and data to computers and other devices on demand. It is a model for enabling ubiquitous, on-demand access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications and services), which can be rapidly provisioned and released with minimal management effort. Cloud computing and storage solutions provide users and enterprises with various capabilities to store and process their data in third-party data centers. It relies on sharing of resources to achieve coherence and economy of scale, similar to a utility (like the electricity grid) over a network.
The term cloud computing was first used in an academic context by Prof. Kenneth K Chellapa, who described it in 1997 at the Informs Conference in Dallas as “a computing paradigm where the boundaries of computing will be determined by economic rationale rather than technical limits”. 
source: Julie Bort
Common Cloud Computing Examples
- Microsoft Office 360: Online application
- Google Drive, Dropbox: Online storage