AWS is Amazon Web Services. You have been seeing more and more of it in the news as it is the largest current cloud provider.
AWS is a cloud provider which means they provide data space, computers and software to allow people to do all these without needing local storage or massive machines. AWS does this by having large data centers located throughout the world so people can usually use the one closet to their users although different locations have different costs.
The data centers have huge amounts of storage that Amazon rents out through AWS. You can rent just data space, similar to your hard drives and flash drives etc, except it is not at your location but is somewhere out there on Internet. You can also rent it so when you have increased needs they rent you a larger space and then when needed reduces the amount you rent which goes back down. For instance many Internet retailers use this ability and from Thanksgiving to Christmas rented a larger amount of space and only rent a small amount the rest of the year.
In addition to space, you can set up virtual machines in this space and not have to buy servers but use virtual (not real physical) servers on AWS. You can also run software on these. You are responsible for setting up your security just as you were when you had your own physical servers.
AWS requires you have connectivity to the Internet which any company considering would already have. Individuals can use AWS also
Over the Christmas holidays I took two courses from Palo Alto Networks learning ho w to use their firewalls. For the labs the instructor had rented space on AWS at their Singapore data center and we installed Firewalls in that space and worked on settings on them. He also had the files we needed for the labs in that space. Although I was working on the labs from Georgia and connecting to Singapore (literally half way around the world, I found that it was fast connections and worked like the storage and machines were with me. Just like if it was local there was a time or two, the connection was slower but not significant.
There are many predictions that AWS and other cloud providers are how we will be moving all storage and larger machines. There also a number who expect the cloud will be a large amount, as we are now seeing however, that stuff will be local also. I lean to the second group, however waiting on something to happen to a major data center and see how things go then. If you buy large plans AWS and other providers will sometimes off site backup as part of it. However for many users unless they buy backup also that there is no off site backup. The users are responsible for their own backup and I have the impression few people backup what is on the cloud.