Cloud Computing -What is it?

What do they mean when they are talking about Cloud Computing?
 
They are talking about the moving of your application programs from your own hardware to having it provided from another company that specializes in Information Technology( IT). By letting them handle all the IT functions it frees you up  to focus on what makes your business money instead of how to get your IT running properly.
 
Think of it this way, it's the difference of buying vs. renting, except in the wonderful world of computing you can rent just what you need, when you need it, and the way you need it.  This is accomplished by a fairly recent computer technology of virtualization, you may be using this if you have a Mac and run Parallels or VMWare's Fusion which allows you to run MS Windows on a Mac.
 
Virtualization makes it possible to relocate your programs from your computer to their's and because it is virtual you can expand it when needed, like at peak times, and when you don't need it it can turned off. You pay for only the time and resources that you actually use, like the electricity or gas for your home.
 
Below is a short video that helps explain this in a fun way.
 
Have you started to use Cloud Computing?