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Data Center to cloud?

We have our own data center for our office and we are looking to move everything to a "cloud" service.

From what ive read these cloud services dont host applications? They only host data (images, videos etc)

Our servers include pretty big data bases as we do merchant processing.

Our CEO feels that cloud is the way to go but it just doesnt seem like we can replace our data center with a "cloud" hosted traditional services are out of the question.

Anyone shed some light would be greatly appreciated
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"Cloud" is a nebulous term (pardon the pun).  Why buy only services?  You can run your own servers in a virtual environment.  Even as simple as Windows Server2003 migrated to an Amazon AWS server instance.  You can host anything in a virtual server, using your own licenses or rented from the server provider.

"Cloud" is a trendy term now.  But I don't see how it fits or fixes every situation.  I've seen shared environments fail.  Microsoft services disappear.  Google technology fizzle out.

What problems are there that the data and services need to be moved offsite?
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CEO thinks its a way of cutting costs. Rent for the space, HVAC maintenance, power etc.
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