I spend a lot of time speaking with customers, vendors, analysts, and "cloud providers" about IT Cloud services. It never ceases to amaze me how many equate Cloud with a guest Operating System running under a VMWare or Xen hypervisor. This incredibly narrow view not only entirely misses the point of Cloud, but focuses on a particular instantiation that has an incredibly low barrier to entry into the market.
Let me provide an example from another field that most people would understand: transportation. Imagine you were to describe transportation. You might talk about moving people and/or things, individually or together, long or short distances, fast or slow, by air, ground and/or water. You might cover some of the various methods, like cars versus trains, ships versus barges, helicopters versus fixed wing aircraft; or the ways that they are powered, like petrol versus coal versus diesel versus wind or some such. All are valid ways to describe such a topic. One might argue that focusing in on any one segment could hinder your understanding of the topic.
Say that people started to equate transportation with a petrol powered bus, not only ignoring but eliminating all the other options out there. Immediately there would be problems. Some people would complain that a bus doesn’t help them easily move things that are not people, and that transportation must be a bad thing because sometimes buses get overcrowded, too slow, or don’t go where they want to go. Companies start labelling themselves “transportation leaders”, because they too can easily go out and get a bus and a driver, and add their own pinstriping or unique seats to their offering. Potential customers start to roll their eyes and say “transportation was so yesterday” because they too dabbled with buying their own bus but couldn’t see what all the excitement was about when they packed their employees in and out of it.
This might sound silly, and so does equating Cloud with a hypervisor. Cloud is the ability to consume a service, whether it is a simple infrastructure service like an OS on a hypervisor, or a much more complex one like CRM or billing, that a person or company can consume on demand (i.e.- as soon as one wants it, like electricity or telephony) as much or as little as they want, when they want it, and know that it will work predictably within certain service level thresholds (electricity will be there, with the right wattage; bandwidth will be there with the right agreed throughput with acceptable interference and uptime). The power really comes from the speed, cost, and flexibility that those services can be provided. It needs to be as easy to build out one’s back office by simply going to a web page with a credit card and selecting where your customer information is (say, in Salesforce), tying it to logistics information (provided, say, by UPS) and accounts receivable (provided, say, by HSBC), into billing, inventory, and integration platforms that can flex as demand shrinks or grows. It should also be easy to immediately select and provision IT and telephony items for a new office, as well as creating and rapidly resizing a new web presence in a far flung market to support the waxing and waning of new marketing campaigns.
A guest operating system under a hypervisor can provide some of these capabilities, much like a petrol powered bus can provide some transportation capabilities. Cloud is far more than that.