Cloud computing is an umbrella standard pair and grid is one component of cloud computing. Cloud computing is distributed computing paradigm in which software information is permanently stored in server on the Internet and cached temporarily on clients. Cloud computing is not a new technology. Cloud computing is related to grid computing as well as it is based on distributed system. Cloud computing is used to provide services, access resources according to its different types. This paper explains in brief about the cloud computing and grid computing as well as how both concepts differ from each other, its key strengths, and characteristics.