I don't hate the cloud -- seriously. In fact, ClipTraining, the company I co-founded, uses cloud-based infrastructure to deliver its video training to clients. Using cloud-based infrastructure keeps us worry-free around availability and scalability. We weighed the pros and cons, then decided it makes sense for us.
That's the important take-away: You must consider the good and bad to determine if the cloud is where your data center infrastructure should reside. There's no one single formula. Plus, with all the hype, it's easy to miss some of the pluses and minuses.
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Scalability. Scalability is one of the great things about cloud-based infrastructure. If you need to scale quickly, you can do so without shopping for more hardware, deciding on virtualization products, and worrying about finding the right people to support your conventional IT infrastructure. Of course, in companies that have an infrastructure in place, that's not to say you can't find the space or power to spin up additional VMs when you need them -- you can. Bureaucracy may be the holdup internally, but let's face it: That same bureaucracy would likely get in the way of commissioning more cloud resources, too.
Availability. Availability is also a blessing, but not as pure an asset. I have experienced brief outages, but they didn't cause major problems among my clientele, who look to us for on-demand video training, which typically lacks the urgency of email or banking. However, some very notable disruptions at Amazon.com over the last several years have taken down popular services for one or more days. You need to factor the implications of possible outages on where and whether you rely on cloud infrastructure.
Security. You might have noticed that I didn't mention security as an item my company worries about. Certainly, security issues may arise, but our cloud-stored data isn't high-value. However, we would worry if we stored other kinds of data in the cloud. Last year, for example, Amazon-owned Zappos was breached, and credit card data was possibly lost. What does this prove? That cloud-based solutions are vulnerable, just like your on-premises systems might be.
The difference is that I don't know who's responsible for the security policies being maintained with my cloud infrastructure. I don't know how safe my data is, and I cannot check personally to ensure policy is being followed whereas I can if it is on-premises. If security is a big concern -- as it would be for hospitals, banks, and government intelligence agencies -- you might want to keep that data behind your own firewalls, handled by people you reviewed and hired personally.
Cost. You'll need heavy accounting smarts to work through this area. Many IT admins prefer to go with cloud services because they are overwhelmed with the stress of day-to-day operations, often due to understaffing. They don't have time to handpick every last piece of hardware. Plus, when they compare the basic cost of storage in the cloud versus on-premises, the cloud appears more attractive.