What is the difference between a Web service and a cloud service?

As a programmer, this is something that I should know, but I have been looking at the explanations and I can’t make sense of them. They say that if I have a Web page as a Web service, the program takes up a fixed location on the hardware, by which I assume they mean that it resides on a disc drive, and that when the service is accessed each user is allocated space in memory. Having written Web services, I can agree with that. Then they say that the cloud service does not take up fixed space on the hardware. Where then is the program? It can’t be floating in the air like its namesake.