Abstract:Cloud computing is the representative innovation of the world's new round of IT revolution. It has become the strategic technology and basic innovation platform that lead future information industry and economic society’ s development. We first examine the development of the emerging cloud computing industry both in China and in developed countries, and then analyze the application of cloud computing in China's electronic business and electronic game sectors. Drawing on the case study, we find that the technological and business capabilities of the domestic cloud service companies are continually enhanced through exploring the new cloud computing business model. The cloud computing will be deployed across all sectors of the Chinese economy, and we need to promote cloud computing to be diffused and applied to the government, medicine, and education fields. Its high performance and availibility characteristics are recognized by more industries, and implementing pilot cloud applications stimulates the cloud industry growing and forming of ecosystem. It is critical to form the interaction mechanism among the technological innovation, application innovation, and business model innovation to stimulate the industrialization and leapfrogging development of the cloud computing. Finally, the paper presents the related policy recommendation that we proposed from the perspective of technology, talent, market, and security through systematically analyzing the development of cloud computing both in China and in developed countries.