Cloud computing - where is technology headed to?

Something cloudy? Not exactly.
I heard this new buzzword at my workplace some months back and its interesting to know how and where the technology is headed to.

Cloud computing is the highest degree of encapsulation to the user wherein she/he cannot see anything running behind his desktop as such. Rather on the other side, the users need not worry about the underlying infrastructure/applications enabling them to place a purchase order for his employer. But the question is - do these really work?! There are already instances of such realization. The best examples are Google/Yahoo/Amazon. We are in the verge of following the footsteps of outsourcing fever that started a few years ago. The mantra of outsourcing was "give away and earn more" and the same seems to be slowly applying to clouds as well

Some food for thought:

Pros:
1.
Effective usage of computing power - the greatest advantage is that we will be able to do efficient and effective computing with this model. We are definitely far below the ideal threshold usage of computing power with our pervasive and disparate computing capacities

2.
Easy regulatory compliance as the only record needed in most of the cases would be a SAS70 report. So, the company saves effort and some smart bucks too!

3.
Reduced IT budget. With the prices being attractive and on-demand, this appears to be the way to go! So, it could be time to fire some IT employees:-

The other side of the coin:

1.
Is the same level of security ensured as one would have on-premise? Ofcourse contractually the vendors are bound to maintain confidentiality. But have we reached an ideal world already?

2.
This will also open up a new world with a chain of vendors, say vendor X offering an application which in turn is hosted by the infrastructure provided by vendor Y. Who would be liable in case the customer loses his data integrity? Will this be just another law suite as many others that go on for years?

3.
Are the exit options safe? How can I make sure, there's no image left on the cloud after I discontinue to use the service?


Nevertheless, for me, it appears we are not there yet. Of course, not a bad start at all. I would use on-premise for my core business and any day use clouds for non-core businesses (anyways, does it matter?


Gulmohar.