How much does your company spend every few years replacing and updating your network servers, storage, and other equipment? Cloud computing eliminates most of those capital investments by using servers and storage at a professionally operated data center you can depend upon for full 24/7/365 non-stop operation. When the majority of the equipment is off your premises, you need less space to house that equipment, less electrical power, less air conditioning, and you don't need to hire staff to manage and operate it. Instead, you pay a fixed, budgetable, monthly operating fee.
Also, you only pay for what you use in the cloud. When you need more processing power or storage, you simply request more and you get it instantly. When you're done and no longer need it, you simply dial it back down and stop paying for it.