Cloud computing refers to on-demand access to shared computing resources like networks, servers, storage, applications and services over the internet. It provides advantages like rapid elasticity, broad network access, resource pooling and measured service. There are three main service models - Infrastructure as a Service (IaaS), Platform as a Service (PaaS) and Software as a Service (SaaS). Cloud deployment models include public, private, hybrid and community clouds. Key characteristics of cloud computing include agility, cost savings, device/location independence and scalability.