Cloud computing is a term that has gone from “new and innovative” to “overused and cliché” faster than you can blink. Besides that, the definition spans areas ranging from service-oriented architecture (SOA), Web services and software as a service (SaaS), to hosting services and outsourcing. Cloud 2.0 can’t be far off.

A recent meeting I had with executives of an electric utility company focused on the analogy of electrical generation and computing services, per Nicholas Carr’s book, The Big Switch: Rewiring the World, from Edison to Google. Part of Carr’s analysis is to compare the development of other technologies—especially electricity generation and distribution—to IT’s development, and to show how IT will move from locally owned and generated capacity to centralized services. It’s a valid analogy between the electricity cloud and the data cloud.

When we’ve asked most companies’ management, “Do you use the cloud?” they generally answer with a quick, emphatic “no.” But then we find out that the company’s 401K is managed through a service provider that offers it over the Web, and that HR and recruiting are done that way, as are a host of other services—all functions that just a few years ago would never have been delivered on anything but private company systems. 

And so the cloud grows, even with the occasional burp. I love pundits who predict that massive service delivery over the Internet is doomed to failure—and point to a recent outage at Amazon. For them, I have one word: Internet.

You can be a Chicken Little on major tech advances like [Ethernet inventor] Bob Metcalfe once was: For many years, he warned of the Internet’s collapse, but he has changed his views. Or you can recognize the self-improving, self-healing nature of a key trend, such as cloud computing. But caution is still the watchword in the short term, as the cloud is in its early stages.