Why is this cloud following the Xbox One?

Hey guys and gals if you have not heard we are in a war...a console war that will dominate our lives pretty much until the next one and the thing that has been pushed forward from both Microsoft and Sony is the "Cloud" which basically follows you or you're gaming identity should I say which Is kinda creepy. If like me you are confused on this matter the lovely people at Microsoft have given us a nice picture that will help us to understand what the "Cloud" is and what it actually does.