We might be walking on Earth, but our computing is increasingly being done in a virtual cloud removed from the hardware—the phones, netbooks, laptops and other devices—that we touch on a daily basis.

The basic idea is that information and software are increasingly being delivered through a network so that they are available anytime, anywhere from any device that can access the Internet.

Anyone using Yahoo Mail, Hotmail or Gmail is working in the cloud. And the same goes for users of Amazon's popular wireless reading device, the Kindle. And there are a host of applications people use on the iPhone, the G1 phone loaded with Google's Android software, or other smart phones that bring people into the cloud.

Cloud computing has also been likened to utility computing, whereby individuals and companies purchase additional network bandwidth, storage and computation capacity as on-demand services.

But now some companies are offering all three. Amazon, Google, Hewlett-Packard, IBM, Microsoft and Sun Microsystems are among the host of companies offering cloud computing services and reaching out to consumers, small businesses and the government.

Amazon has been offering cloud services for close to three years. Microsoft also created officelive.com, where consumers can create a free online workspace for one year that includes a place for Word, Excel and PowerPoint documents, along with a free Web site and domain name.

The cloud is driving the development of a new paradigm for consumer electronics. Consumers will increasingly be able to do more with smaller and simpler devices, since software and other applications will essentially live in the cloud. That means the days of worrying about maintaining your operating system on your own computer may disappear.

But it also means that access to computer software and services will move towards an on-demand model. The Kindle is a case in point because Amazon—not the consumer—pays for the constant connectivity of the device to the Internet. The Kindle model may force cellular phone companies and other telecommunications providers to reinvent their services so that the information provider—not the consumer—pays the bill for connectivity, he says.

A "race" has already commenced between the computer industry and the telecommunications and cellular industry. The question is whether the computer industry will control life in the cloud with netbooks—smaller, less-costly laptops—or whether the cellular industry will dominate the playing field with cell phones that "turn into cloud platforms."