Cloud computing refers to applications and services that run on the internet or "in the cloud". It involves migrating software from local computers to servers hosted on the internet. There are different types of cloud computing including Infrastructure as a Service (IaaS), Platform as a Service (PaaS), and Software as a Service (SaaS). IaaS provides virtual hardware, PaaS provides platforms for developing applications, and SaaS provides ready-to-use software. Cloud computing offers advantages like mobility, flexibility, collaboration and outsourcing of maintenance compared to local systems.