Cloud computing provides on-demand access to shared computing resources like servers, storage, databases, and software over the internet. It offers advantages like reliability, unlimited storage, device independence, and cost savings compared to maintaining physical servers. There are three main layers - Infrastructure as a Service (IaaS) provides basic computing resources, Platform as a Service (PaaS) provides development environments, and Software as a Service (SaaS) provides ready-to-use applications. While cloud computing offers benefits, it also has disadvantages like vendor lock-in, internet dependency, and security concerns.