Does anyone even have a clue what cloud computing even is? Remember the days of monochromatic screen terminals that hooked to the all powerful mainframe. The terminal had little to no computing power and all applications ran on the mainframe. How is the idea of cloud computing really any different? The underlying implementation has improved and changed but the idea is still the same. To call cloud computing a "paradigm shift" is just a bunch of marketing BS.
Now that I got that out of the way, cloud computing is some really cool tech. Additionally, cloud computing infrastructure runs on some really big iron. Not in the monolithic big system world but in the distributed commodity grid system world. This means that even small businesses can use big iron that used to only be available to big budget companies. A great example of this is "Dropbox." Without access to Amazon's S3 storage service, Dropbox would have been crushed by the cost and overhead required to manage its user's storage demands. The capital cost of a top tier data center filled to the rim with servers is beyond what most startups are able to raise in seed money.
The benefits aren't without tradeoffs. First, you most agree to the SLA(service level agreement) of the provider. For some, this will be a killer. This is the case for the company I work for. The data we collect and analyze doesn't necessarily belong to us. The agreement we sign with our customers precludes us from storing data on computers we do not directly control. Before deciding to use "cloud computing" for your application, know the trade off. If you are willing to give up some control and nothing legally precludes you from using it, "cloud computing" opens up some pretty amazing big iron possibilities for small application developers.
A few cloud computing providers (Tip: read the fine print before using):
Google
Amazon
Rackspace