Is 2011 the year of the cloud?

The real shift in cloud computing will come as and when businesses start to move core applications.

Early cloud computing success stories, such as hosted email or sales force management, work in part because they appeal to markets where large numbers of users are mobile. For such users, there are fewer disadvantages, and sometimes considerable advantages in terms of bandwidth and security, of connecting to a third-party datacentre.

Moving the core to the cloud

Core business applications, including enterprise resource management, analytics and financials, as well as office productivity software and databases, are a trickier proposition. Barriers include application compatibility, data security and privacy, and connectivity speeds and latency. Smaller businesses, in particular, might struggle to buy bandwidth at a price that makes data-intensive cloud computing cost effective. "Chatty" applications that need to keep in constant contact with a central server are less suited to cloud computing than services such as email, where small delays are unlikely to affect real-world application performance.