I am afraid “Cloud Computing” is another one of those areas where the technology field has taken a conceptually simple idea, and thrown some cute techno babble over it making it hard for the average business to determine whether or not it is useful to them. At its most basic level, “the cloud” is just the network that your computer is connected to, and “cloud computing” is using applications that are built and administered by others on that network. Gmail or hotmail are perfect examples of cloud computing applications.
When deciding if cloud computing is relevant to your business, forget all the fancy terminology and realize that the decision boils down to a classic make versus buy scenario. Using a cloud application is basically tasking another company with maintaining the application (usually good versus doing internally) but also trusting them to secure your data, and stay in business past the next quarter (an obvious risk). When you couch the cloud in these terms, it becomes much easier to compare the costs of building an hosting an application yourself versus looking “to the clouds.”