The cloud is a metaphor for the Internet in cloud computing.
Cloud computing enables a user to access software applications, hardware, data, and computer-processing power over the web, rather than by loading software onto an organization's server or a personal computer. Consequently, the user can use the power of the Internet (the cloud) as his personal computer, processor, and storage environment—connecting to tools and resources as needed.
A cloud-native system or application is designed from the ground up to work in the cloud. It is not an existing software or legacy system with a web front-end attached to it. Cloud-native systems must be inherently distributed to support operating in a cloud, and they are elastic—they should be able to scale applications down as well as up, based on load.
Additionally, a cloud-native system must offer multitenancy, which means that only a single instance of an application runs on a server, but it serves multiple client organizations or "tenants." Finally, these applications typically are self-service and offer granular billing (pay per use rather than pay by user or pay by timeframe).
For more on cloud computing, check out "2010 Trends Create a New World of Learning" in the December 2010 issue of T+D.