Cloud computing allows users to access computer programs, files, and other applications remotely through the internet instead of having to install and run them locally. It offers three main models - Software as a Service (SaaS), Platform as a Service (PaaS), and Infrastructure as a Service (IaaS). SaaS provides access to applications, PaaS provides platforms for developing applications, and IaaS provides basic computing infrastructure and storage. The cloud offers benefits like reduced costs, flexibility, and maintenance being handled by the cloud provider, but also risks like dependence on the cloud provider and internet connectivity.