Cloud computing involves storing and accessing data over the Internet instead of on a local hard drive. It has several components, including end users, data centers containing servers that host applications, and distributed servers located across different geographic locations. There are three main service models: Infrastructure as a Service provides access to computing resources like servers; Platform as a Service provides tools to develop applications; and Software as a Service provides complete applications running on another company's system. Cloud computing offers advantages like convenience, security, backups, collaboration, and being environmentally friendly, but also has disadvantages such as potential security breaches, outages, storage limits, slow speeds, and limited features compared to local software.