The recent announcement of vSphere by VMware has the IT field buzzing about 'Cloud.' Aside from the fact that every vendor out there has a different definition of 'Cloud,' there are some serious concerns when it comes to converting your existing monolithic (read: legacy) infrastructure to a cloud computing model.
Probably the first term that comes into my mind when I think about cloud computing is 'trust.' This translates to security and accompanying risk to most IT management people. There is a huge amount of risk associated with implicitly trusting a 3rd party external vendor for cloud computing resources. Many of these vendors have made huge strides to mitigate these risks, but certain businesses, such as health care and financial institutions, can not afford to have a data breach. This limits their infrastructure to a private cloud model.
Security aside, the second largest concern with a migration to a cloud computing platform is application migration. Most if not all of your applications will need to be re-written or ported to a cloud application model and this will incur significant cost. It will also require a culture shift within your development team. This can be a good thing, but if you have developers that are inflexible or married to one language or platform, you are in for a bumpy ride.
Another issue to pursue (probably before you even engage a vendor for information) is vendor lock in. You want to make sure that you can easily move from one platform to another if the need should arise. Most vendors are very clever at disguising the various hooking points where they leverage vendor lock in, so you need to be agressive when questioning them about this.
With these major concerns out of the way, the last couple of things to look at happen to hinge on the fact that cloud computing is relatively new in the IT sphere, so many of the tools and components are still in their developmental infancy - so to speak. This also makes calculating TCO very hard since the platform will have several more major upheaval and shifts as it matures. What may seem like a black and white acquisition cost today will inevitably be far short of the real cost at the end. Management of the overall platform, users, data, security, SLAs, etc., will be difficult as there are few major tools available to aid your IT staff from the onset. As the platform matures, however, this will become easier and should result in an overall reduction in management dollars.
The important thing to remember when planning and implementing a cloud computing infrastructure is that you are making a shift for the better. Your business will be more agile and robust as you move forward, and the paradigm shift is a good one. In this economy, every competitive advantage returns huge rewards at the bottom line, and that is not likely to change for a long time.