The "Cloud" is a term used loosely to describe a shared virtual service or function provided on or through the Internet, such as email or a photo hosting site. A Cloud Service may be physically located in one or more data centers. Unlike previous models, Cloud service users generally do not have input into internal operations, such as where facilities are located, when they expand, or when data is moved to a different server or facility. Instead, users choose services based on guaranteed service levels (hours of operation, speed, capacity, etc.).
The term "Cloud" comes from the practice of using an icon of a cloud on network diagrams for any system or service where it's details were not known.