It depends on who you ask.
In cloud computing, your application is still being hosted on a virtual server with failovers in a massive data center. Technically there is nothing being done there that can't be done within an on-site datacenter, but the cost savings with the cloud are that you don't need to run a datacenter, buy and maintain hardware or hire people to support it.
Of course the massive datacenter requires money to run a datacenter, purchase and maintain hardware and hire support personnel, however a single small datacenter might require 8 employees to maintain, a massive one hosting cloud applications requires perhaps a few hundred but replaces a 1000 small datacenters. Net job deficit = smaller costs = smaller month to month operation fees for clients. Further these massive data centers bully themselves into regions (Eg. Texas) that will not charge them any taxes and sometimes even provide subsidies for the massive amounts of electricity they consume. This further lowers their bottom line.
EDIT: Removing unnecessary personal information, and prejudices.