, dynamic allocation of resources, and speed and reliability achieved through standardization and automation are all necessary components of building clouds, IBM said.

While the cloud concept is similar to utility computing, which has been talked about for years, IBM said the newer cloud model will work better because of more efficient delivery methods and technical models making it easier to scale resources up and down.

"Cloud computing will transform the data center," Edel said.

While companies such as IBM have pushed the notion of enterprises building internal clouds for their own employees, Harr contends that that approach is simply a continuation of what he calls the "box model."

"From my perspective, cloud is a service," Harr said. "It is something you should be able to use both externally and internally, but it shouldn't lock you to internal environments."