When they advertise storage "in the cloud" what they mean is some extra storage on their computers which is accessible through the internet. You'll get 200GB of additional storage in total, and will need to be connected to the internet to access it.
It can be handly if you want to store photos so that you can download them when you're not at home, maybe on your phone, but it isn't really an equivalent to extra storage on the hard drive. 3.99 for 200GB seems expensive, many network suppliers will give you 20-50GB free with your broadband subscription, which is usually plenty, and of course if you stop paying that 3.99 you lose all the data you stored there.
If you need more local storage you'd be better off just buying a portable 500GB hard drive which you can plug into the computer when you need it. They are less than £100 these days.
