I have heard and seen a lot of buzz from HR recruiters about cloud computing. Not sure if it is understood but here is a good attempt to define it right from Wikipedia.
Cloud computing is Internet-based computing, whereby shared resources, software, and information are provided to computers and other devices on demand, like the electricity grid.
Cloud computing is a paradigm shift following the shift from mainframe to client–server in the early 1980s. Details are abstracted from the users, who no longer have need for expertise in, or control over, the technology infrastructure “in the cloud” that supports them. Cloud computing describes a new supplement, consumption, and delivery model for IT services based on the Internet, and it typically involves over-the-Internet provision of dynamically scalable and often virtualized resources. It is a byproduct and consequence of the ease-of-access to remote computing sites provided by the Internet. This frequently takes the form of web-based tools or applications that users can access and use through a web browser as if it were a program installed locally on their own computer. NIST provides a somewhat more objective and specific definition here. The term “cloud” is used as a metaphor for the Internet, based on the cloud drawing used in the past to represent the telephone network, and later to depict the Internet in computer network diagrams as an abstraction of the underlying infrastructure it represents. Typical cloud computing providers deliver common business applications online that are accessed from another Web service or software like a Web browser, while the software and data are stored on servers. A key element of cloud computing is customization and the creation of a user-defined experience.
Sounds great but here is the flip side also from Wikipedia
Forrester Research VP Frank Gillett expresses criticism about the nature of and motivations behind the push for cloud computing. He describes what he calls “cloud washing” in the industry whereby companies relabel their products as cloud computing resulting in a lot of marketing innovation on top of real innovation. The result is a lot of overblown hype surrounding cloud computing. Gillett sees cloud computing as revolutionary in the long term but over-hyped and misunderstood in the short term, representing more of a gradual shift in our thinking about computer systems and not a sudden transformational change.
Richard Stallman said that cloud computing was simply a trap aimed at forcing more people to buy into locked, proprietary systems that would cost them more and more over time. “It’s stupidity. It’s worse than stupidity: it’s a marketing hype campaign”, he told The Guardian. “Somebody is saying this is inevitable – and whenever you hear somebody saying that, it’s very likely to be a set of businesses campaigning to make it true.”