According to Gartner's 2010 Hype Cycle Report, cloud computing has read the hype peak, and is beginning the descent into the “Trough of Disillusionment”:

While this may be the case, there are still new examples of cloud hype cropping up every day. Witness Microsoft's current “To The Cloud” campaign:

Is the cloud relevant to the user in this case? Nope. To the user, it's a website. That's it. I can only imagine that Microsoft wants to tie the “cloud” to the consumer market to capitalize on the hype peak. Unfortunately, this is creating a huge amount of confusion as to what the cloud is and what it's for. Over at GISUser.com, Glenn blogged about a Financial Post article describing the level of confusion among Canadian executives about cloud computing. Well, no wonder, when Microsoft is telling them that it's a website where they can edit photos of their families!

So what is the cloud? It's software services and computing resources running somewhere else, that you connect to and consume over the web, as opposed to software and hardware resources running on your desktop or on a server somewhere in your organization. That's it. It's not magic pixie dust. It's just software running somewhere else that you don't have to worry about. Why is it called the cloud? Because that's what we software people draw on the whiteboard when we want to represent somewhere where stuff happens that we don't have to worry about, secure in the knowledge that it works.

Cloud computing isn't revolutionary: it's an evolution of a set of technologies and architectures that enable the business architecture of the cloud. And, really, that's what the cloud is and why it's important: it's a business architecture. For businesses, it can do the following:

1. Shifts capital expenditures to operating expenses. Operating budgets are harder to cut than capital budgets. It's a case of “it's the cost of doing business” vs. “we'll have to tighten our belts and wait until next year”.

2. Reduces risk by converting a large, up-front, fixed cost into a series of smaller, scalable payments in the future, which can be terminated as per contract terms.

3. Eliminates the overhead of hosting the software and services in-house.

In lots of cases, the cloud computing model is a compelling business architecture. But the vast majority of end users will never have to think about it.

Finally, I leave you with today's Dilbert strip, which pretty much sums up the cloud hype cycle:

Have fun and stay safe in the cloud.