IT as a service has come to the forefront in the last few years including Amazon's Web Services, Elastic Compute Cloud (EC2), Simple Storage Service (S3), Google's Apps and the Salesforce platform-as-a-service product, with a new language no less. Sorry, but we just couldn't help that last comment.

As wonderful as the cloud sounds, be wary. According to analyst firm Ovum, Cloud computing is over hyped, and enterprises should exercise caution after high-profile outages at providers such as Amazon cloud services. "A spate of service outages on the Amazon and Google platforms has increased enterprise caution about the reliability of consumer-market-oriented cloud providers."

The cloud creates new CIO management challenges, since it runs like an electricity grid. Unlike outsourcing, where quality skips are protected by service-level agreements, a cloud service outage may not be remedied quickly. "We take it for granted the electricity grid occasionally fails. We also know that when the power is out, we are usually not the only one affected," said Ovum. What's more, virtually any service has been branded 'cloud' and the term has been over hyped, according to the analyst firm.

Cloud computing is an opportunity for business to implement low cost, low power and high efficiency systems to deliver scalable infrastructure. But moving to a cloud infrastructure is not necessarily as easy and clean as the providers would want us to think.

Over the next five years, IDC expects spending on IT cloud services to grow almost threefold, reaching $42 billion by 2012 and accounting for 9% of revenues in five key market segments. More importantly, spending on cloud computing will accelerate throughout the forecast period, capturing 25% of IT spending growth in 2012 and nearly a third of growth the following year. Many analysts and industry-watchers believe that Cloud Computing is changing not just the technology landscape, but also the entire nature of the business models that underpin successful software and hardware companies. Entrepreneurial opportunities abound as this classic disruptive technology begins to proliferate.

During this challenging economy, cloud computing is more than just vaporware, Ovum added. During these recessionary times, the analyst firm predicts CIOs will turn to cloud services for its massive economies of scale.

Ovum urged CIOs to start limited trials of cloud computing now, to gain practical experience on what the technology can and cannot do, and how the new management challenges will be overcome. Overall, the virtualization market has grown from approximately $560 million in 2005 to a forecasted $2.7 billion in 2009, according to IDC. According to Gartner, virtualization will be the highest-impact IT trend changing infrastructure and operations through 2012.

Creston has recently conducted a Cloud Computing poll with very interesting participant comments:

Richard Stallman, founder of the Free Software Foundation, believes that cloud computing endangers liberties because users sacrifice their privacy and personal data to a third party. He stated that cloud computing "was simply a trap aimed at forcing more people to buy into locked systems.

From Geoff Feldman:  I'd be more interested in the results if we have a definition for "cloud computing". I've seen people talk about it and unable to really explain what it is. For me, Cloud Computing (as distinguished from things that have been around for years) is the ability to distribute a computing application with varying resources depending on need and Service Level Contracts (SLA). This is what the Amazon and Microsoft programming interfaces about and really not much else. If you don't have a large load application, you are not implementing Cloud. In two years, it will just be another tool in the tool box and we an move on to the next buzz word that is poorly understood.

Our response to the question: Cloud computing is a style of computing in which dynamically scalable and often virtualized resources are provided as a service over the Internet. Users need not have knowledge of, expertise in, or control over the technology infrastructure "in the cloud" that supports them.

The concept incorporates infrastructure as a service (IaaS), platform as a service (PaaS) and software as a service (SaaS) as well as Web 2.0 and other recent (ca. 2007?2009) technology trends that have the common theme of reliance on the Internet for satisfying the computing needs of the users. Examples include Salesforce.com, Google Apps or Windows Azure which provide common business applications online that are accessed from a web browser, while the software and data are stored on the servers.

The term cloud is used as a metaphor for the Internet, based on how the Internet is depicted in computer network diagrams, and is an abstraction for the complex infrastructure it conceals. Comparisons Cloud computing is often confused with grid computing ("a form of distributed computing whereby a 'super and virtual computer' is composed of a cluster of networked, loosely-coupled computers, acting in concert to perform very large tasks"), utility computing (the "packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility such as electricity") and autonomic computing ("computer systems capable of self-management").

Indeed many cloud computing deployments as of 2009[update] depend on grids, have autonomic characteristics and bill like utilities ? but cloud computing can be seen as a natural next step from the grid-utility model. Some successful cloud architectures have little or no centralized infrastructure or billing systems whatsoever, including peer-to-peer networks like BitTorrent and Skype and volunteer computing.

To be continued...