Cloud Computing is a new term in IT jargon. In simple words, cloud computing refers to the software running on Internet servers. Here is a bit detailed definition from joyent.com.
"Software previously installed on personal computers is being shifted or extended to be accessible via the Internet. The term for this is “cloud computing”. In the cloud, you run your application on one (or many) virtual computers. The advantages to this approach include reduced up front hardware costs, reduced maintenance and administrative costs, the ability to match hardware and software capabilities and, most importantly, the flexibility to scale your site up and down depending on demand."
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