The term Cloud refers to a Network or Internet. Cloud computing means sharing computational resources(Storage, Software, Database, ) as a service and dynamically reallocated per demand.
For example, a cloud computer facility that serves European users during European business hours with a specific application (e.g., email) may reallocate the same resources to serve North American users during North America's business hours with a different application (e.g., a web server)
Cloud-computing providers offer their "services" according to different models
Software as a service (SaaS)
In the software as a service (SaaS) model, Cloud providers manage the infrastructure and platforms that run the applications. SaaS is sometimes referred to as "on-demand software" and is usually priced on a pay-per-use basis or using a subscription fee.
Ex: Office365, Google Apps(Docs, Sheets, Photos,etc.,).
Platform as a service (PaaS)
In the PaaS models, cloud providers deliver a computing platform, typically including operating system, programming-language execution environment, database, and web server. Application developers can develop and run their software solutions on a cloud platform without the cost and complexity of buying and managing the underlying hardware and software layers.
With some PaaS offers like Microsoft Azure and
Google App Engine Supports Python, Java, PHP, Go ProgrammingEngine yard Deploy, Scale, and Manage Your PHP, Ruby, & Node.js Applications
Infrastructure as a service (IaaS)
Providers of IaaS offer computers (physical or virtual machines) and other resources. To deploy their applications, cloud users install operating-system images and their application software on the cloud infrastructure.
Reduce capital costs:
The Motorola Moto E went on sale at 00:00 hours on May 14 exclusively on Flipkart. Soon after it went on sale, the Flipkart's sever could not serve requests. Server shows "Please try again in sometime." It is because of limited servers. So the existing infrastructure should be well equipped to handle the peak hour traffic. But we can’t purchase the number of servers and manage them just for 5 days because remaining days there was no use with them. So in cloud we can take service just for five days with low cost from cloud providers.