Cloud computing borrows concepts from grid computing, namely the ability to harness large collections of independent computing resources to perform large tasks; and from utility computing, namely the metered consumption of IT services, according to Kloeckner.

But perhaps the real impetus for cloud computing are failings within the current IT infrastructure, Kloeckner said. Seven out of ten IT dollars are spent on maintaining systems, and perhaps 85% of capacity in distributed computing environments sits idle at any given time, he said. Storage requirements are escalating too quickly for many data centers to keep up.

The basic message from vendors: Cloud computing, while still in its infancy, is the solution to these problems.

Early days, lingering issues

Still, there's a lot more work that needs to be done to address the concerns customers have when deciding whether to move key applications outside of their firewalls. Ideally, an application built for one cloud service should not be locked into that service forever. It should be able to move freely from one to another, or from within an enterprise's network to outside the network.

Some vendors are already working on portability. An application virtualization company called AppZero recently unveiled technology that moves server-based applications from within the enterprise data center to services such as Amazon's Elastic Compute Cloud in seconds. Moving applications from Amazon to another cloud provider, such as GoGrid, also is possible with the AppZero tool set.

The problem also is being addressed in the academic world, where a standards group called the Open Cloud Consortium is trying to improve the performance of computing clouds spread across geographically disparate data centers and also promote open frameworks that will let clouds operated by different entities work seamlessly together.

Within security there are many issues that must be addressed, according to the Cloud Security Alliance, including compliance and auditing, e-discovery, encryption and key management, identity and access management, disaster recovery, and incident response, notification and remediation.

Ultimately, cloud vendors will be judged on five broad categories: security, scalability, availability, performance and cost-effectiveness, Vogels said. While there are shortcomings today, he predicted huge advancements in the next few years.

"It is still day one," Vogels said. "We've just begun widespread deployment of these services."

© 2007 Network World Inc.