Abstract: Today, computing becomes steadily more important and more used. Cloud computing has appeared as an accepted computing model for processing very large volume of data. Cloud computing is an unavoidable trend in the future computing development of technology. In this paper, we have discussed the computing taxonomy and their relationship with cloud computing. Then we have discussed the essential characteristics, layered service model architecture and deployment model of cloud environment. Last we have identified the several research challenges, cloud adoption challenges along with the applications of cloud computing. This paper is for those who have heard first time the term “cloud computing” and wants to know about its taxonomy. Also this paper will provide an idea of design challenges of cloud computing and help in identifying important research directions in this area.