The concept of a cloud as the paradigm for abstracting the complexity within traditional data center operations and computing began with network administrators. They used a cloud metaphor to document the details of large local and wide area networks. When they depicted something as a cloud, they would reference it as “all the users” of an application or resource, or “the public network” or privately owned wide area network (WAN) resources within an organization.
Therefore, the cloud metaphor was used to show abstraction from physical or logical resources within a datacenter or throughout an organization. This is an apt metaphor for one of the enabling technologies of the cloud: virtualization.
We know the concept of cloud computing is not new. During the frantic days of the dotcom era, many startups that wished to provide goods and services over the Internet could not afford to build the required infrastructure to provide those services. This need caused a dramatic surge in new offerings by other startups. These companies embraced the American entrepreneurial spirit by providing outsourced services for IT. They were dubbed as SaaS (software/storage as a service) providers or application service providers (ASPs).
More of the ComputerWorld article from Chris Poelker