As outlined in the post Building Cloud Connectors: Polling, a Cloud Connector is an application that, using the Eloqua APIs "polls" an Eloqua Campain Canvas or Program Builder Step for members. It then performs an action on those members, and sets the member status to move it onto the next step.
The basic flow for a Cloud Connector app is as follows:
For counting members in a step, retrieving them, and setting their status, you will need to use the ExternalActionService.
For updating contacts, companies, or custom data objects, you will need to use the EloquaService.