Cloud applications are computer programs that are accessible via a network, typically the Internet, and can be accessed through a web browser. They usually have functionality that is somewhere between a standard desktop application which is entirely local and those of a pure Web app which would be stored in its entirety on a remote server.
Much like desktop software, cloud applications can often run offline and have the responsiveness of a desktop app. Yet like a Web app, cloud apps do not need to be hosted permanently on the user's local disk. Also, with cloud apps, the issue of updating software of generally easier for the end user and smoother in general.
The cloud apps main advantage is that, so long as the user has a fast enough internet connection, the app will be interactive like a desktop app but portable like a Web app.