Cloud computing means running software and storing data on servers owned by a provider — like Amazon, Microsoft, or Google — instead of on hardware you own and maintain yourself. You access it over the internet and pay for what you use, similar to a utility bill for electricity or water.
This model is usually split into three layers: infrastructure as a service, where you rent raw servers and storage; platform as a service, where the provider also manages the underlying operating system and runtime; and software as a service, where you just use a finished application, like an email client, without touching any of the infrastructure behind it.
The appeal for businesses is flexibility: a startup can launch a global product without buying a single server, and can scale up instantly during a traffic spike instead of waiting weeks for new hardware to arrive.