One of the latest and most important buzzwords to know today is “the cloud.”Other than a fluffy collection of condensed moisture, “the cloud” is a blanket term for using the Internet to outsource various computing-related problems.For example, you might do document editing with Google Docs or with the upcoming Office 360, or you might use an online backup service such as Carbonite to back up all the files on your computer instead of purchasing a physical backup drive. By using Carbonite, you have essentially “outsourced” that extra storage to a service provider and are using cloud storage.A good way to determine whether a service you use falls under the category of “cloud computing” is to see if it performs all its functionality without Internet access. If it doesn’t, it probably has some critical component running in the cloud.Until recently, understanding the concept of cloud computing was useful, but hardly critical. After all, if you didn’t know what cloud computing was, you were unlikely to be using it. This trend has slowly been changing with the popularization of services such as Dropbox, Carbonite, Gmail and Google Docs, which have seen widespread adoption as of late and have brought the importance of understanding cloud services to the fore. This is because as great as these services are, they won’t tell you about the downsides while trying to get you to buy them. There will be pros and cons of using the cloud services of the upcoming Office 365, but many of the same issues exist with other cloud services such as Dropbox and Google Docs.MICROSOFT OFFICE is one of the mostsold programs in history. One would be hard-pressed to find someone who hasn’t heard of Word, Excel and PowerPoint, and a working knowledge of these three programs is a prerequisite for a surprising number of jobs. As such, any changes Microsoft makes in the Office suite is cause for both elevated interest and potential concern.Sadly, although the program is pretty much a requirement for everyone using a computer, purchasing Microsoft Office isn’t straightforward at all. The differences between the various licenses are not as clear as they could be, and many people discover, to their chagrin, that they are using an improperly licensed version or that they can’t continue to use their purchased copy of Office once their computer has had some of its components replaced. Office 365 changes all this by virtue of being a cloud-based subscription service rather than a traditional application that you install on your computer. As such, the software will be licensed to you, the user, rather than to a specific computer, and the program will be stored in the cloud.The advantages are obvious. First of all, since your documents are stored in the cloud, you can access them comfortably from any computer: Just log in with your username and password and open them with Office – even if its not installed on that computer. You can install Office on up to five computers and (at least in the pre-release version) change those computers at any time. This means your license goes with you rather than being stuck on outdated hardware and forcing you to buy it again and again.So far, this cloud stuff sounds great.Being able to transfer licenses is important, considering their cost, and being able to open documents anywhere and work portably is definitely appealing, especially to anyone who has ever needed to work on a computer that doesn’t have Microsoft Office. But as with all good things, there is always a catch.Unlike when you use a backup program or an extra hard drive, the information stored in cloud software and services isn’t really on your computer. Because of this, you are subject to the provider of that service as well as to a functional Internet connection. If you can’t connect to the Internet or the cloud system is down for maintenance, you will not have access to those services or the ability to access your files and use the programs necessary to display them. That means no uploading to Dropbox, no accessing your Carbonite backups and no using the Microsoft Office you desperately need to finish writing that paper you have to hand in.On top of all this, if Microsoft deems that you’ve broken its terms of service, it can block your account and you can lose access to everything: all the documents you have stored in their service will become instantly irretrievable and if you were smart enough to save a copy on your computer at home, it won’t help you because you no longer have a copy of Office with which to open the files. You might be thinking that this will never happen to you, but the terms of service are actually quite restrictive considering the range of things a person might type in a document. For example, uploading a legal eBook you purchased to Office’s online storage (SkyDrive) so you can access it as you work on your paper may be a terms-of-service violation that can make the whole paper you are working on – as well as your entire account – disappear.And finally, what happens if someone gets access to your account? With many of your important documents and programs stored outside your control and protected only by a username and password, a hacker could cause incredible damage by reading and forwarding damaging documents, deleting important documents or services and even breaking the terms of service and getting your account permanently closed down.The cloud is worrying, not necessarily because of any of the above issues, but because people aren’t aware of them. Hopefully, when Office 365 comes out for home users, people will make the purchasing choice that is right for them and not just choose the service with the better advertisement.