My personal belief is the term 'Cloud' started with SaaS marketing people that probably got the totally unoriginal idea from the Internet commonly being depicted as a cloud on network diagrams. Just like a network involving Internet access and/or VPN connections between sites, you don't care how the ISP(s) get your data from point A to point B -- you just set up a Service Level Agreement (SLA) and pay according to your minimal acceptable downtime and bandwidth. So, that's what SaaS companies want you to do. They don't want you to specify the physical location of the servers or how to care for them -- they just want you to tell them your acceptable service levels and let them worry about where the servers are located and how they are protected, patched, managed, backed up, etc...
However, then you pair SaaS with Virtual Machine technology and then you have SaaS that is quickly scalable to the customer's needs. Company A buys Company B and inherits 500 users. No problem, the SaaS company brings up two more virtual e-mail servers to handle the load. No hardware to procure, no servers to build, no applications to install. Just bring up a base image, configure it and add it to Company A's monthly bill. Same scenario in reverse if Company A sells off a business unit or downsizes by 500 users.
Now, having been in a sizable and highly political corporate environment, I believe some IT upper-level management types see "Cloud Computing" as a win-win, as they can sell it to the CFO as only paying for what services they need, and they get to offload security, maintenance and backups to the SaaS company. On applications moved to the 'Cloud,' they just have to worry about network links and firewall security. Other than that, when things go bad, out comes the SLA and all blame is shifted from the upper echelons of IT to the SaaS company.
As a quick personal side note, I'm not a fan of 'Cloud Computing' simply because of data security. What happens to your private company data when the 'Cloud' vendor chooses to offshore its datacenter because SysAdmins are cheaper overseas and it chooses to do so in a country that only allows a low level of encryption or has laws that allow the country's government to peruse your company's Intellectual Property? Same question when the 'Cloud' vendor fails to provide adequate electronic and/or physical security measures?
So, I don't consider the 'Cloud' to be anything original in name or function, but more of just a repackaging of technologies that have existed longer than most 'Cloud' vendors would like for you to believe. Regardless, 'Cloud' does sound better than, 'Software as a Service combined with Capacity on Demand rolled up in the best CYA package for which you are willing to buy.'
When will companies realize that the cloud is not the best solution for everything? My wife needed a prescription filled at a chain drug store. The computer network was down so she had to wait over 24 hours to get her prescription filled. What if it had been something life threatening, then what? With all the failures over the last month would you trust the cloud? Not me. I have my own personal server, and that is the way I intend to keep it for a long time.
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