Abhik, in a reply to "Why can't clouds be inside (the data center)?" says that "the whole point (and primary benefit) of cloud computing is that someone else manages the computing resources. That set of resources is drawn as a cloud in a network diagram because you, the developer or the company using cloud resources, neither knows or cares to know the specifics of the computing infrastructure. An in-house cloud would require procurement, management, maintenance and continuous cost even during idle time -- it is just a grid."

Is it? Is that the primary reason enterprises might be considering cloud computing?

If so, then why didn't managed hosting and outsourced data centers become more popular? Why didn't more organizations simply go the outsourced IT route? If the primary benefit of cloud computing really is simply obviating the need to be concerned with day to day operations, then it would seem that cloud computing may not gain as much traction as people seem to think - or hope - it will.

What about scale? What about use of idle resources (efficiency)?  What about the dynamic provisioning and de-provisioning of resources based on usage? And can't you get that inside the data center as well as out?

There are reasons other than "we don't want to waste time building, managing, and running our own data center" to adopt cloud computing in any form. Dynamic scalability, greater efficiency, and platform independence are also seen as benefits to cloud computing and it is these benefits that are independent of the physical location of that cloud. 

There are good reasons not to move toward "true" cloud computing, and they go far beyond the minor hiccups in service availability experienced by cloud computing providers today.

1. Compliance

We've talked about this one already, but let's summize again: who is responsible for compliance with HIPAA, SOX, BASEL II, and PCI DSS when the infrastructure and operating systems on which applications run must also be compliant?

2. Accountability

What assurances do you have regarding up-time and performance levels? What provisions are afforded the customer if those service level agreements are not met? A book-bag and a branded coffee cup? A gift certificate for Barnes and Nobles? Profuse apologies?

Are your investors and/or shareholders willing to hold accountable a third-party provider or does the burden lie on your shoulders?

3. Security

What security measures are in place to assist you in securing your application? What assurances do you have that the underlying OS is patched regularly and is not accessible to the general public? What application layer security is available to augment existing application security? Are the databases used multi-tenant or dedicated? Who has access to your data?