It provides online storage. You can save documents to iCloud. You can grab them with your iOS device (including your iPhone) anywhere you can connect to the Internet. iCloud also can store your iPhone backup, which lets you restore your settings and data if you have to wipe your iPhone clean back to factory settings.
iCloud uses your Apple ID to identify the other devices and computers that should synchronize together. Therefore, all of your computers and iOS devices must use the same Apple ID for iCloud to work properly.
You can easily tweak your iCloud connection to synchronize only the data you want to share with other devices and computers.