The way it was explained to us, SmartCloud Notes is full-blown Notes except the server is in IBM's cloud instead of in your building. You can hit SC Notes with any supported browser or Notes client.
Pricing is ala carte, you can have some or all of your users in the cloud. If you run custom apps, tho, you need to have an on-premise server.
If you want the social stuff, that is where Engage comes in.