The third element of an IT organization that must be rebuilt for cloud computing is finance. Obviously, there is the pressure to be as inexpensive and transparent as the public alternatives -- that goes without saying. The opaque, mysterious and highly lumpy forms of IT cost allocations will no longer be tenable in an environment where alternative providers publish price lists on the Web.

Just as important, though, will be a financial approach that provides real-time feedback and analytics to enable application groups to assess the tradeoffs in terms of deployment location, load variation, time-of-day load shaping, and other factors.

To be blunt, the kind of crude assertion that an internal storage deployment can undercut a public storage provider based on the cost of an array fails to comprehend how revolutionary a transformation is required in terms of IT finance. This is not about proving that one alternative is cheaper than another -- it's about ensuring that the right alternative is selected based on application characteristics, and ensuring that any of those applications can be deployed into environments that support the necessary functionality at an appropriate price. Any CIO who cannot support such a sophisticated analysis of overall application costs is assuring his or her own obsolescence.

In my view, cloud computing represents a step change in IT. We've had lots of experience bringing in new generations of technology -- the shift from mainframe to mini, from custom RISC chips to commodity x86 chips and so on. The list is lengthy.