Consider two projects with similar business and technical capabilities delivered:

1. Online analytics and business intelligence portal built with standard BI development and off-shoring practices.  From initiation to end, 9 months and $1.4mm, on time, and +/-5% of budget - a successful project.
2. Online analytics and business intelligence portal built with cloud-based BI provider, using "expensive" on-shore development team.  Same methodology, 3 months and $500k - quite a bit ahead of schedule and budget.

I'm a skeptic by nature, so I tend to wait out the hype.  And when it comes to Information Technology, the amount of hype generated can only be bested by the entertainment industry.  Early last year, I took a wait and see approach for "cloud" since it was generating a lot of hype.  But then, these two projects occurred back to back.  Once you get past the hype, there are significant cost savings and time to market gains that cannot be denied.  In a sense, cloud-sourcing showed me the money, and fast.

That's not to say that all is wonderful in going to the Cloud.  Several of respondents that I interviewed for the "Diagnosis:  Cloud-Aware Applications as Competitive Advantage" presentation were very blunt about challenges of migrating existing applications and existing application development methods into this brave new world.   Both methodologies and design principles have to be tailored (and then followed and measured rigorously) to allow for an effective cloud-aware application.  However, with cost effectiveness and time to market opportunities inherent in creating effective cloud-aware applications, it is certainly an investment worth making.

AAB