Very similar to the early cell phone adopters or high speed internet adopters, Cloud Computing has just begun.

For a long time many CIO's and CTO's were afraid to host their information in anything other than a box that they could literally touch. Now that technology and security have caught up with us, that trend is being reversed.

Throughout time networks and computers have done two things for sure. They have gotten smaller and relied on remote infrastructure to process information.

Kim Hart wrote an article in the Washington Post, where she points out that Cloud Computing does have some oposition who see this as just another hot buzz word that will soon fade like SAAS. She writes, skeptics say that it's nothing but hype.

"Cloud computing is the same old client-server computing we've known for years, except pretending to be intoxicatingly new and different and liberating," wrote Peter Lucas and Joseph Ballay in a report published by Maya Design, a technology research lab. "The marketing fairy godmother waved her wand over the whole 'new model' and pronounced it 'cloud computing.' "

Technologists say cloud computing is largely made possible by its distant cousins: open source and virtualization.

Sure open source and virtualization play roles in Cloud Computing, but there are a few things that differentiate it from a virtual server. In a true cloud computing environment one will find a few characteristics that can not be found in a typical hosted server supported by open source technology. Here one can find an elastic, state of the art solution, which can be adjusted with the click of a mouse and can handle any traffic spike.

In a single server environment there is a limit and human interaction to move to the next threshold.

The conundrum for many IT firms is it does at time cannibalize their existing, more traditional streams of business.

In a traditional IT environment there are charges and minimums for bandwidth, colocation (including space and power), hardware costs and a staff to support it. With the cloud, these are all condensed into one nice technology with a great total cost of ownership.

All of the technology sector follows one of two paths, up, or down. It is virtually impossible to stay stagnate, because the sector is evolving so quickly.

Right now the trend is to exploit the technology available to do more with less. Although the technology of virtualization has been around for quite some time, the adoption rate is souring and finally people are getting out of their own way in order to really get some business done.

The beauty of this is that it's just the beginning and it certainly will be a nice ride.

I have to admit that over the past several decades I have become a cynic when it comes to the ability of government to deliver on time or on budget. My typical slight on a business that I believe is bloated is, "ABC Co. is just like the Department of Motor Vehicles". Usually, when I say this, people automatically understand that I mean that ABC Co. must be bloated, faceless, slow, and bureaucratic. I don't want to sound unpatriotic, but I had come to believe that our state and federal governments were too far gone to ever be considered nimble and dynamic. I struggled with the idea that privatization to more efficient organizations might be the only way to get things done in government. What would it look like if FedEx and UPS ran the US Postal Service? If we let some Swiss or German rail company run Amtrak? Imagine the geniuses at WalMart taking over supply chain management for the Pentagon.

These were just crazy visions of a guy who had written off government as never being able to efficiently deliver services. That was before I ever heard of Vivek Kundra. If you have not been paying attention to recent nominations by President Obama, Vivek Kundra was appointed the first Federal Chief Information Officer on March 5, 2009.

Mr. Kundra, 34, has a compelling life story. Born in India, his family moved to Tanzania at a young age. His first language was Swahili. When he was 11, his family moved to Gaithersburg, MD. He holds a BS in psycology and Master's of Science in Information Technology, both from the University of Maryland. After school, Kundra served as Vice President of Marketing for Evincible Software and CEO Creostar. In 2001, Governor Timothy M. Kaine of Virginia appointed him assistant secretary of commerce and technology. Kundra was the first person to hold dual cabinet roles in the history of Virginia. Kundra left his Virginia postion to take on the role in Washington DC, Mayor Adrian Fenty's cabinet as the District of Columbia's CTO (a rold which he held for 19 months, prior to accepting the post as National CIO). Kundra has kicked some butt while in his DC CTO position, overseeing 600 staff that provided technology services for 86 agencies, 38,000 employees, as well as 600,000 residents, businesses and millions of visitors.

One of the first initiatives that Kundra took on as DC CTO was to find a way to cost effectively empower DC employees to have better computing power and collaboration. To do this, he chose to use Google Apps, and other consumer technologies in the public sector to quickly scale. Another example of Kundra's success as DC CTO was when he set up a 30-day contest with a cash prize, called Apps for Democracy. The estimated cost for producing the contest, including the prize, was $50,000. Kundra estimated that the District probably saved close to $2.6 million over what it would have cost to hire contract developers. The contest invited developers to come up with the most innovative way to use data feeds from DC government for Web and mobile applications The contest resulted in 47 Web, iPhone and Facebook apps that benefited the city. In his October 15, 2008 essay, Building the Digital Public Square, Kundra wrote about how his Apps For Democracy team took the District's vast stores of data on all aspects of government operations and offered it up to everyone to use. By organizing the information into convenient catalogs and live data feeds, made available at the Data Catalog, anyone could go in and find information on crime incidents by date, time of day, ward, block or other methods. Other data on construction projects, parking, tourism, leaf collection schedules and various others were all made available, with more than 240 different data feeds made available.

Kundra envisions a digital public square, where everyone (constituents, policymakers, concerned citizens and businesses) can have access to important data without the traditional governmental red tape and cold/distant bureaucracy. Kundra is a fan of cloud computing to dynamically scale applications that are successful, without the bloated cost of building massive infrastructure on individual tech projects. What an amazing concept to bring to government!

In his new role as Federal CIO, Kundra wants to move the government away from its dependence on big IT contracts. He pointed to cloud-based services used by the private sector to quickly create and provision development platforms, as well as for information sharing, such as for photos and videos. "Yet, you look across the federal government, and we don't have a single platform that allows you do that," he said. "We have the ability to run an open, transparent, participatory and collaborative government."

If Kundra gets to implement his vision for the US Government, we can expect to see a change in how technology projects are spec'd, bid and delivered. I can't wait to see what is in store for US citizens. I can only imagine we will be watching YouTube videos on how to apply for Social Security benefits, or possibly using iPhone apps to vote in future federal elections.

Great article I found on Forbes .

In light of all of the historical comparisons about the current economic situation and its proposed fixes, I'd like to offer my own perspective based on technology trends that have the potential to re-ignite growth for decades. My analogy comes from what at first sounds like an unlikely source: the automobile industry.

In the early 1900s, Ford ( F - news - people ) mastered the art of assembly line manufacturing, revolutionizing production techniques across industries, from consumer goods to large-scale machinery. What was once the privilege of the upper class became within reach of the average citizen.
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The efficiencies gained through mass production not only put a car in every garage, but also catalyzed consumer culture, reset the baseline standard of living and reshaped everything from how and where we worked, to how and where we lived.

The introduction of the assembly line began moving our economy away from an inefficient, build-to-order model to scale manufacturing. Over the last century, the automotive industry dramatically refined the art. Today, companies including BMW run highly automated factories that seamlessly integrate customers' orders with parts suppliers and dealerships. This configure-to-order model allows for customization not available in the Model-T era, while preserving and enhancing the efficiencies gained by the assembly line.

The early 21st century is like the early 20th century in that we are at the beginning of a new economic paradigm. This time, however, the engine of growth will not be manufacturing, but information.
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The equivalent of the assembly line is industry standard hardware, the components used to build the backbone of the largest Internet companies on the planet. Standardized hardware has unshackled the computing power once trapped in mainframe computers, democratizing it so that all can share. More recently, software has been developed that virtualizes, automates and differentiates this hardware to enable a configure-to-order model for the IT industry.

Even better: The "cloud" can deliver these capabilities and offer a new level of customization and efficiency at affordable prices and on a massive scale.

There's been a great deal of hype in the industry about cloud computing. To say it simply, the cloud is the next stage in the evolution of the Internet. Its impact, however, will be sweeping, fundamentally changing the way we connect with each other and with information.

The cloud is making once-expensive information technology available to a mass market through a pay-per-use model. This promises to increase productivity and drive growth. Small and medium-sized businesses can leverage data to drive efficiencies and improve products and services. Large companies can shift applications to the cloud and so spend their resources on the technology that gives them a competitive advantage.

More importantly, with this underlying infrastructure in place, both large and small companies can use technology to expand or invent services, open up markets and address some of the biggest challenges we face as a global society. For individuals, this promises services that are more intuitive, personalized and relevant in our daily lives. Here's one example:

HP has a cloud service, called MagCloud, that makes it possible for anyone to publish a professional-quality magazine and print, promote, sell and deliver it on demand. Printing on demand means no large press runs, no pre-publication expense, no waste.

By eliminating substantial pieces of the physical supply chain, we can offer professional-quality print to a mass audience while reducing the impact on the environment. The same on-demand technology can be extended to book publishing and allow individuals to print customized books, mixing their own content with that of professionals.

Looking ahead, we envision a rich ecosystem of printing services--connecting businesses to businesses and businesses to individuals--that delivers information where, when and how it's needed.

This is truly just the beginning. The cloud makes it possible to deliver everything as a service--from business processes to personal interactions--and to create altogether new business models across industries.

In my view, the ability to facilitate innovation and entrepreneurship in this new model is one of the most promising ways to ignite the next wave of economic growth. We can no more see the full impact of the cloud than Henry Ford foresaw the impact of his desire to produce more cars in less time.

Russ Daniels is vice president and chief technology officer of Cloud Services Strategy at Hewlett-Packard ( HPQ - news - people ).