Cloud computing is a term used currently (2014) to describe a type of internet-based computing where software and data are stored and processed on computer servers that are accessed (typically via the internet) by devices like desktop computers and mobile computing devices. In a typical small business context, this means that common business applications and data are stored centrally, not on ones personal computer.
The term cloud originally was used as a metaphor for the Internet, based on the cloud drawing used by network engineers and others to represent the Internet in computer network diagrams. The model of computing where various devices accessed centrally located data was described using various terms, most notably "Software as a Service" or SaaS. The term "the Cloud" became more predominant when marketers like IBM and others began to use it in mass advertising.