Let me start by setting out my philosophy of cloud computing, shorn of the marketing hype and corporate-speak with which it has been clad.

First of all, at bottom, cloud computing is simply a data processing resource. It is a data processing resource with certain attributes:
o It is distributed
o It is a shared
o It is heterogeneous
o Virtualisation is essential
o Access is via the Internet (shown as a Cloud on so many network diagrams and hence the name)
o Its proprietary aspect is the global infrastructure and thus delivered through major corporations

Now it is certainly more complex than this simple list as any guide will explain (see for example, http://en.wikipedia.org/wiki/Cloud_computing). Yet it is these attributes that will determine its acceptance. The benefits are clear in savings on capital investments, flexibility, scalability and sustainability. Reliability should be better but there will be choke points or points of vulnerability in any distributed system that can cause interruption to service. Security and confidentiality will continue to be an on-going issue that will not be satisfactorily resolved for many years to come. The involvement of the big, competing guns like Google, Microsoft and IBM provides an enormous commercial pressure for expansion.

Cloud Computing can trace its origins, perhaps, to the ‘software-as-a-service’ concept introduced a dozen years ago. Social networking has contributed to the development by creating an immense population of individuals who are familiar with the concepts of Cloud Computing although not necessarily with the term. Many are already customers of Cloud Computing if they are using Google not just Search but Google Apps – Gmail, Calendar, Docs and so forth. And all for free, of course.

Pricing models in the commercial world vary depending on the type of application, the number of users, hours, resource consumed and level of service. Competition in the form of specialist and niche providers will make pricing more complicated.

Just as so many other markets based on the Internet have experienced rapid growth, so will Cloud Computing. Yet for structural reasons it is unlikely to achieve J-curve expansion. Customer awareness of Cloud Computing choices will be slower, so that for providers this looks like a market that should have comfortable margins for a while.

In 1961, John McCarthy http://www-formal.stanford.edu/jmc/ first suggested at MIT that data processing power might in future be sold as a utility like water or power. That future is still on the cards and Cloud Computing has brought it a step nearer.