iCloud is free e-mail and syncing services. That means that you don't to hook up the iPhone and iMac to exchange contact and calendar information. Since I have a desktop, laptop and an iPhone I use iCloud (and previously MobileMe) to keep the information on all those 3 devices the same (contacts, calendar and mail). There are other solutions like what Google offers (really bad contact sync) or what hosted Exchange companies offer (it is simply exchange which gives you good contact, calendar sync and mail).