In short, cloud computing, or developing in the cloud, implies on-demand access to development resources including both data and software. This is all done via a network rather than from a local computer. Developers would have very little data or software pre-installed on their local machines; instead, they access all development resources via the network, from the cloud. Generally, cloud-developed solutions are deployed via the cloud in the form of software-as-a-service.
Limitations, pros and cons to developing in the cloud are extensive depending on the point of view. The general principle, and leading benefit, is that any computer connected to the Internet can be connected to the same pool of resources (software, applications, and data) and potentially each can be equally productive at far less overhead costs for development.