I compare the cloud with any service available over the Internet. This may include cloud applications such as Microsoft Azure, similar software / platform as a service offers from other providers, dedicated server hosting or public server hosting solutions, which are much cheaper.
There was some confusion for Windows Phone 7 developers when Microsoft's cloud offering was offered to students when the All In campaign started, while the Windows Phone 7 campaign continued to work.
For the developer, the confusion was caused by the question of how I can support the costs of Microsoft or another platform as a service offer, when my application will be free or return income of an unknown amount.
In the much-needed positioning comments offered to Windows Phone 7 developers, Microsoft clearly pointed to Cloud regarding shared hosting services, their cloud services, and Windows Phone 7 applications.
In short, this is a budget challenge. If you have income to cover cloud services (maybe for any provider), then this is the most scalable model. Until then, it is recommended to use traditional hosting services.
This is explained in more detail in this post.
Azure Storage and WP7
Mick n
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