In the simplest terms, cloud computing means storing and accessing data and programs over the Internet instead of your computer's hard drive. The cloud is just a metaphor for the Internet. It goes back to the days of flowcharts and presentations that would represent the gigantic server-farm infrastructure of the Internet as nothing but a puffy, white cumulonimbus cloud, accepting connections and doling out information as it floats.
What cloud computing is not about is your hard drive. When you store data on--or run programs from the hard drive, that's called local storage and computing. Everything you need is physically close to you, which means accessing your data is fast and easy.