From Jim Schweitzer:

Imagine this scenario: You call up your buddy on your favorite video chat software. When he picks up, you notice he's standing in front of a big painting that's filling up the background of the entire screen. Upon asking where he is, he tells you he's at a coffee shop at the mall where he is buying new artwork for the office. After a few minutes of chatting, he says he has to go and asks you to call him back in 15 minutes. Anxious to finish the discussion, you call him back and pick up the conversation where you left off. As soon as you're done, you hang up and walk down the hall to grab some coffee. Suddenly you notice your buddy sitting in his office hanging his new painting. What the heck just happened here?

This is The Cloud in action. Let's dissect the scenario.

When you clicked your buddy's name in the buddy list, your goal was to see and speak to him. This was a name-based transaction. The data, in this case, was the video and audio that made up both calls, and as far as you knew, the first call was just as valid as the second call. The Cloud is at work here - location becomes irrelevant because the reference queues (your buddy and the background view) are identical in all scenarios. In the typical Software-as-a-Service, SaaS scenario, the items held constant are the databases being accessed and the presentation of the web user interfaces, etc.

Location irrelevance is one of the foundations of the World Wide Web. Domain Name System, or DNS, exists to provide human users with name-based routing to avoid the need to access computing resources by specific addresses. In this regard, The Cloud is nothing new. The added concept is only that some businesses are deciding to take advantage of the Internet available outside their office walls for the housing of critical services that typically have been maintained in a specific location.

When is it appropriate to externalize critical IT services? Under what scenarios is it preferable to keep full control of a system in-house? These questions don't have universal answers. Businesses should conduct a risk analysis on aspects such as security, data sensitivity, performance, infrastructure, cost, intellectual property and training to determine their ideal mix The Cloud versus in-house solutions.

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Jim Schweitzer is the Operations Manager at Vision Point Systems, an engineering and technology consulting firm with offices in Fairfax, Virginia and the Virginia Tech Corporate Research Center in Blacksburg, Virginia.