Local drives are physical storage devices directly connected to your computer, like internal hard disk drives (HDDs) or solid-state drives (SSDs), or external USB drives. Their capacity is strictly defined by the physical hardware you purchase. Cloud storage, in contrast, refers to virtual space hosted on remote servers accessible over the internet; its available capacity is determined by the subscription plan you choose from a service provider, not a physical device you own.

Common examples include using a 4TB external hard drive (a local drive) to back up personal photos and videos offline. For cloud storage, individual users might utilize Google Drive's 2TB plan to access files across multiple devices, while businesses rely on platforms like Amazon S3 or Microsoft Azure for scalable storage potentially reaching petabytes, handling vast datasets like application backups or multimedia libraries for streaming services.

Key advantages of local drives are direct, fast access without internet and one-time cost. However, they have strict capacity limits requiring hardware upgrades or replacements and risk physical damage or theft. Cloud storage offers virtually limitless scalability on-demand, remote access, and built-in redundancy, but depends on internet connectivity, involves ongoing subscription fees, and raises privacy/security considerations due to data residing offsite. Choosing between them involves weighing budget, accessibility needs, data volume, and security requirements.