Definition
Cloud computing is the model defined in NIST SP 800-145: ubiquitous, convenient, on-demand network access to a shared pool of configurable resources — networks, servers, storage, applications and services — that can be rapidly provisioned and released with minimal management effort.
How it works
A provider pools the compute, storage and networking inside its IDC facilities, and users provision what they need through a console or API, paying by usage. NIST lists five characteristics (on-demand self-service, broad network access, resource pooling, rapid elasticity, measured service) and three service models: IaaS, PaaS and SaaS.
Usage
From website hosting and data backup to AI training and inference, the cloud gives teams elastic compute without building their own facilities; capacity scales up at peak and is released afterwards, and cost follows usage.
Related and confusable terms
Cloud computing is the overall model; a neocloud is a newer class of provider within it that focuses on GPU capacity; infrastructure is the underlying layer the cloud abstracts away; a VPS is the earlier, single-virtual-machine form of renting compute.