Question: The company I work at recently hosted a web service in Windows Azure and announced that. Now trade online magazines say lots of meaningless stuff like "company X moves to the cloud", "company X drops desktops for the cloud", etc.

Looks like there're lots of materials out there (starting with [Wikipedia](http://en.wikipedia.org/w/index.php?title=Cloud_computing&oldid=459932705)) that are very lengthy and talk a lot about "services" and "low entry price" and other stuff but I've read all that and don't see how they could be helpful for a layman in drawing a line between a service in a cloud and Stack Exchange that is also a service but is run on brick-and-mortar servers in a colocation.

Now from my experience with Windows Azure the real difference is the following. With a cloud the service owner rents hardware, network bandwidth and right to use the middleware (Windows 2008 that is used in Azure roles for example) on demand and also there's some maintenance assistance (like if the computer where a role is running crashes another computer is automatically found and the role is redeployed). Without a cloud the service owner will have to deal with all that on his own.

Will that be the right distinction?

Answer: 
Cloud computing says absolutely nothing about who owns the resources. Cloud computing is an architecture for developing distributed, network-based applications. There are a number of cloud computing service providers out there, such as Azure Services Platform, Amazon Web Services, Google App Engine, and a number of others. However, using someone else's service is not a prerequisite for developing a cloud computing infrastructure.

The idea behind cloud computing is that you put services and applications on networked devices. You could utilize a hosting service, which would shift maintenance and support to other entities. You could also create your own infrastructure for cloud computing. In addition, there is nothing that says that cloud computing must be public. Yes, you can put your applications and services on the public Internet (with the appropraite security for your applications), but you can also create private clouds within your organization.

In the end, with cloud computing, you don't know where or what you are accessing. You see a service or application without any knowledge of what is behind that service or application. The entire cloud is of no consequence to clients - you know that things that you can use exist, are accessible, and use them. They could be in a "server room", or you could be accessing a distributed grid of sensors and workstations. It really doesn't matter.
Cloud computing begins with *Renting* hard disks to servers. However, it goes beyond that much more. This is not to say that there isn't any hype about it; but i am trying to define what is the key difference between being in cloud and not so! 

In my office we have a set of servers, which i can access from anywhere. Does this qualify to be a cloud? NO! And so is true for many data centers as is.

The core element that forms cloud computing is of course, the hardware infrastructure (servers and disk space) used exclusively through public internet. However, what is important is how this being managed. A critical infrastructure element (though i doubt if people would disagree if you say must) is the visualization. 

In, (what i think) a real cloud, all these servers are combined to become pool of resources tied together over a framework where virtual machines are created. One can create, archive and delete machines. Transfer hard disk space from one machine to another like how you mount them in real machines. These technologies allows that one can shift the data and OS of these machines to move from one physical server to another seamlessly and it comes with various redundancy options and management consoles for services. 

Understand, in good old days (as well as today), one used to get personal homepages and company websites - on hosting space. This isn't quite a cloud. 

Though, i agree that now-a-days anyone who got a static ip - think he has created a cloud- and indeed the word *cloud* has been misused to an extent that there is no real definition to it now!