There are three main types of cloud services:
SAAS (Software As A Service) - This is an application that is completely developed and users simply log in and use it. For example, Netflix or Saleforce.com
PAAS (Platform As A Service) - This is when you need a certain platform, such as a database. You want to program the database, but not manage the underlying operating system, memory, etc.
IAAS (Infrastructure As A Service) - This is when you want to develop your own applications, but don't want to own your own servers, network, memory, etc. This is the most powerful and flexible for developers, because it gives them full control to create their cloud applications.
IAAS benefits companies because they don't have to invest large amounts of time and money to set up their own computing environment. This is especially valuable when a company is first launching a new application. They can develop the app, upload it to their cloud provider, and then only pay as customers use their app.
IAAS has the potential to be more secure than a company's own computing environment, because cloud vendors specialize in security, upgrades, and computing best practices. This is their central business, while companies that try to set up their own network are usually more focused on their actual business (i.e. accounting or banking).
However, IAAS vendors provide a lot of security options to their customers, and it is up to the companies to make sure that they choose the most secure option, not the easiest to set-up.
IAAS trends for the near future include dramatically increasing their storage capacities, and providing support for more non-computer consumer and industrial devices (the Internet of Things).