Cloud Connections represent the credentials or keys to connect to a specific cloud account. Say AWS, Google cloud platform or Azure.
A cloud conneciton can be marked as External or Internal.
Internal Connections:
These are cloud accounts that are owned/managed by your organisation. You pay for the cloud resources created under that account.
External Connections:
These are cloud accounts that are NOT owned/managed by you. These are external to you and someone else (say your client/customer) owns and pays for these cloud accounts.
When you mark a connection as external, LocalOps shows a warning in New environment form when someone tries to use this connection to create an app environment. Just for extra visbility and caution.