What is the cloud?
On every continent enormous data-centres full of computers are rising from the ground. Their scale is spectacular, sometimes built near rivers along with their own hydro-electric power station. The largest provider of cloud computing, Amazon Web Services, has spent $2 billion on its infrastructure. This includes hundreds of thousands of computers, and virtually limitless storage (there are discounted rates for users of Amazon’s S3 that store more than 50 Terabytes, and in March 2010, it was estimated to store more than 102 billion files).
You might be interested in this BBC news article.
These systems are available for hire. As well as hosting the worlds largest internet retailer (amazon.com), Amazon Web Services hosts many other companies, such as NetFlix, Dropbox, Elephant Drive and so on.
How can I use it?
You may either use Amazon Web Services directly – by renting Linux or Windows machines by the hour, and configuring them as you wish – or use a company based within the cloud that has set up a system similar to what you need.
Why would I?
Setting up your own cluster of computers is time consuming and inefficient. Cloud companies have thousands of IT staff maintaining their systems, and inevitably, they are far more advanced than small in-house IT departments can be. They have enormous economies of scale, and so are greener and cheaper than in-house solutions. Typically utilization rates (how much of the time your computers are kept busy) are very low, as it is usually necessary to buy a cluster that is large enough to cater for the peak demand (with a little headroom). By serving so many people at once, cloud computing providers have a less variable demand, and achieve higher utilization rates.
Another reason to choose the cloud is flexibility. Because machines can be rented by the hour, you can requisition an enormous pool of machines when you need them, and you only pay for what you use.