The Cloud (Dessert Topping or Floor Cleaner)?

 John and I have done a lot of interviews with Cloud "experts" over the last few months (this is the fun part of our business, hunting down and talking to really bright people). On the one hand, a lot of the analysis bandied about is malarkey (to be polite). Enterprises won't jump into public clouds to save buckets of money any more than we've all given up our cars to drive Hertz Rent-a-Cars instead (shouldn't they be a lot cheaper for the same reasons, huh?). On the other hand, we've been talking to many of the most successful ventures using Amazon (primarily, and other Cloud providers) and the stories are very interesting. There seem to be two important takeaways for me: (1) The cloud is software gurosity unleashed. A team of brilliant programmers and system architects can make incredible things quickly when unfettered from the nasty bits of buying and running the hardware infrastructure; (2) For speculative ventures, it's hard to beat the economics of pay-as-you-go. VC's like the Cloud because they don't have to by capital equipment with great impact during the early stages of the venture in terms of getting real product development bang for the buck. But it's also clear from these stories that the same benefits carry forward into real service operation especially if the success of the service is unpredictable, especially on the upside. One more time, we seem to be collectively overestimating the short term impact but probably underestimating the long term impact.