"Cloud computing". You probably couldn't invent a more confusing term. Let's break its meaning down from 3 perspectives.

1) Consumer / Business User:
The value of "the cloud" to consumers and business users is their ability to roam. Today you may be using Outlook on your PC. When you go on vacation you take your laptop with you because your software is installed on that computer. By moving your email to "the cloud", suddenly you're able to access your email from anywhere from any device. Your phone, an Internet cafe... anywhere connected to the Internet.

Do you have a huge collection of MP3s on your personal computer? Then you're probably aware of the overhead to maintain such a collection and the limitations that personal storage imposes (not to mention copyright concerns... shame on you ). Moving to a cloud-based music streaming service lets someone else manage your libraries and enables you to "roam" without constraint.

Pretty much any business software need can be addressed by "the cloud". Just take a look around your office and gradually starting replacing the ball and chain of on-premise apps with Internet based solutions. CRM, email, financials, backups, customer service and support, collaboration software.

Your "Kool-Aid" alert should probably be going off by now. No, not "everything" can be moved into the cloud. But portions of software can be moved to the cloud to give you a roaming experience. Photoshop designers will not find an equivalent Internet based application, but you can host your PSD and graphic assets files on a "cloud storage" service to open up collaboration, provide peace of mind by having off-site backups, and facilitating access to those files from your work/home/netbook computers.

Does "the cloud" seem less confusing now? Sure it does. It's a no brainer. It just makes sense that this trend will continue. Next...

2) Financial Users:
If you bought an ERP/CRM solution in the 90's, it was likely capitalized as an asset to the company and depreciated over time. But "cloud" software is just another operating expense, like electricity or water. You control the throttle of how much of the technology to use and pay a monthly or annual subscription.

Is "the cloud" even less confusing now? Sure. Who wants to own and maintain business software as an asset? Nobody. Next...

3) Technologists:
OK, so here's where the war and source of confusion begins. Hold on to your seat. Older software companies are now recasting themselves in "the cloud". Microsoft is thinking beyond the clouds towards "Azure" blue skies. Software companies that were previously "Software-as-a-Service" are now "Leading Cloud Providers". Amazon (yeah, the folks that sell books online) have an "Elastic Cloud Computing" service. IBM, who is *way* late to the game is suddenly talking about "private clouds" and moving your business into "the cloud". There are multi-tenant, isolated tenancy, and virtual machine architectures.

More money is now being spent on marketing "the cloud" than actual R&D for building "the cloud". The positioning for "what is the cloud?" is reaching a climax as vendors seek to be associated with this new buzzword.

The bottom line? As long as whatever is being called a "cloud" enables consumers and business users to roam and the service is just an expense, then you shouldn't care about "how" a particular cloud is implemented.