The UK's Guardian has a piece on Richard Stallman, founder of the GNU Project, in which he denounces Cloud Computing...

But Richard Stallman, founder of the Free Software Foundation and creator of the computer operating system GNU, said that cloud computing was simply a trap aimed at forcing more people to buy into locked, proprietary systems that would cost them more and more over time.

"It's stupidity. It's worse than stupidity: it's a marketing hype campaign," he told The Guardian.

"Somebody is saying this is inevitable – and whenever you hear somebody saying that, it's very likely to be a set of businesses campaigning to make it true."

The 55-year-old New Yorker said that computer users should be keen to keep their information in their own hands, rather than hand it over to a third party.

He's not wrong.  All the issues he outlines do exist.  But I think his view on things might be a little simplistic. 

Here's the thing, Cloud Computing is smart for people who don't have a huge need for computing resources.  It's a means of cost sharing dedicated hardware, knowledgeable staff, and all the other perks of a big IT infrastructure between several other businesses.  Which in turn makes it far cheaper than the other options available.  Its an equalizer for companies that can't afford a full time IT staff or a room full of servers. 

In that respect, I disagree with Mr. Stallman.  Or more accurately, I think he's right but I think the lock-in threat is outweighed by the benefits provided to small business.

As far as large business is concerned, it makes no earthly sense at all.  If you are doing enough business to be able to afford your own infrastructure and professional staff than you'd be a fool to use cloud computing as your primary system.  Because its a one to one correlation. 

If you can afford your own professional staff and infrastructure than Amazon can't undercut you unless they are cutting corners (not saying they are or would, just speaking hypothetically).  You have the same resources available to you as they have to them plus they need to make a continuous profit on top of that.  The only advantage they might have is a discount based on scale but there's no way an initial savings could make up for their profit margin over time.

With that said, there are obviously shades of gray here.  You might need slightly more storage space, or slightly more computing resources, or whatever.  Each situation is different and a dedicated IT person can make judgements accordingly. 

The bottom line is that Cloud Computing, like anything else, is just another tool for IT infrastructure.  No more, no less.  It isn't going to completely change the industry but it shouldn't be avoided completely either.  It's just another way of doing things. 

As a brief follow-up to my last economic post I wanted to point out a few economic indicators.

Again, I'm not saying these numbers are good or that the housing crisis isn't a serious issue.  But in comparison to what they could be these numbers aren't bad either. 

• The Dow closed at 11,143 on Sep. 26 (right before the crisis began).  It now stands at 10,859.  That's a 284 point drop which is bad but hardly a catastrophe (and with a bailout in limbo I don't think Wall Street could get more nervous than it is right now)
• Unemployment is 6.1% (keep in mind that includes a permanent unemployment rate of about 4% which includes Students, Housewives, and others who aren't seeking work)
• GDP Increased 3.3% in the 2nd quarter of '08
• The Consumer Price Index declined .1% in August (a good thing, increase means growing Inflation).  That's the first decline in 2 years.
• Retail Sales fell by .3% in August 2008

Again, the issue isn't "are the numbers good?", they aren't.  But are they terrible?  Are they catastrophic?  Are they the beginning of another great depression? 

No, they aren't. 

This isn't a good situation.  No one's saying it is.  We're almost certainly headed for a recession, I don't think anyone's denying that.  There will be job losses, there will be credit crunches and none of it's going to be pleasant.

But the sky is not falling and I think everyone needs to keep that in mind.