It will be impossible to rebuild for cloud computing if you carry forward a huge technical and financial debt of legacy applications. For one, the cost will dominate your budget and hinder your ability to adapt in the future. Just as important, legacy applications require you to keep staff on hand with lower-level skills to perform manual interaction.

This cost-cutting will play out in two ways: re-architecting home-grown apps to be truly cloud-based (more on that below), and shifting to on-demand SaaS applications to replace on-premises packaged applications.

Down the road, only a very few on-premises applications will be kept in the legacy format. These will be applications that have high security or privacy aspects or those that provide competitive differentiation such that IT organizations can justify the continued maintenance of a high-cost installation. But keeping an on-premises standard package like email? There's no future for that kind of thing.

I'm actually a bit heartened about progress on this front. I recently spoke to a gathering of CIOs and was surprised at how aggressively most of them are pursuing SaaS initiatives. This group was looking to get out of the non-value adding IT business as soon as possible.

Make no mistake: Absent an aggressive push to get out from under the legacy burden, all your cloud computing plans will wither on the vine.