Before we get to carried away with the cloud computing dream lets talk about the fundamental challenges in the network (manual labor and kludge) that may have a substantial impact on the shape of cloud computing, at least in the enterprise.

Newspapers were originally fed on presses manually one sheet at a time.  Telephones were once connected via legions of operators connecting callers (one at a time) with cables and plugs; and today computer networks are still managed by legions of manual administrators who configure network appliances and manage IP addresses as endpoints are added or moved or networks are acquired.   Yet can cloud computing really take that pain away?

How cloud evolves will be partly driven by technical limitations and partly by business case economics; and the way in which cloud is adopted may have a significant impact on the market caps of a host of networking and IT powerhouses, from Cisco and Juniper to Microsoft, IBM and F5 Networks.  

That may be part of the reason behind IBM's recent launch of its own dynamic infrastructure meme in early 2009.  At this point, cloud positioning may be everything.

Is Cloud an IT Escapist Fantasy?
Part of the attraction of cloud computing is its ability to decouple IT services from hardware, especially the kludge works of silos and processes and administrators needed to do everyday network tasks, from adding a printer to a network, reclaiming an IP address or even provisioning a new network. Very few companies have audited how much is wasted on such tasks, even as they are relentlessly squeezing costs out of supply chains.  

They may be the cloud dream's most promising market: those so out of touch with the micro expenses and delays within their network that everything else looks cheap and flexible.  For them, the promise of cloud offers an escape from the nightmare of a thousand cuts.  

The question is really to what extent the cloud leaders, including Google, Amazon and others have really addressed these problems.  Or are they simply writing off these costs as insignificant because the revenue generated is still insignificant?

All of these common network tasks (and many others) require ongoing human intervention and thus drive up network costs as networks continue to grow.  They also impact a networks availability and ability to address new requirements.  As long as networks are islands of manual, anachronistic tools to what benefit are mobile servers and endpoints?  They cannot move very far without manual intervention, pigeonholing the very benefits of virtualization... in a very un-cloudlike manner.

The Free Hypervisor Illusion
Perhaps the most significant contribution made to the IT industry in recent years has been the hypervisor (and VMotion) and its ability to decouple software from hardware; and offer the potential to decouple IT services from hardware, which is the promise of cloud.  VMware, Citrix and Microsoft have led the way, now to be joined by Red Hat.

While these virtualization vendors play with predatory pricing, the real payoffs are perhaps delivered by the partner ecosystems.  That's why hypervisor-based pricing may miss the point.  It's really what you can do with that hypervisor that drives the value.  That's why VMware has an enviable position, despite the Microsoft and recent Citrix price-centric marketing moves.

VMware is also further along in technology, features and deployments.  VMware's relationship with Cisco and the other ecosystem power players could be a second advantage and be a driver behind the Microsoft and Citrix alliance of necessity.  Then where does that leave Juniper and IBM?  Perhaps in a similar alliance.

If the likes of VMware, Cisco and F5 Networks (and others) can deliver the connectivity intelligence that would allow networks to automatically keep up with the status of a VM, it will be a massive payoff that could impact the market caps off all involved.  They could, in effect, drive the manual expense out of the network and establish new economies of scale and performance.

It seems likely that connectivity intelligence will require the cooperation of multiple players, including Infoblox (my employer).  Core network service automation may be step one; yet step two would likely involve the deployment of IF-Map.  

The bottom line is that the more expense that can be driven out of the network the more gear the vendors will sell and the lesser the business case for the coming cloud disruption with or without an economic rebound.  Free gear could cost more in management and consulting and merely hide the core problems even further.

It's Not the Economy, Just Economics
Management (not hardware) costs have been increasing as data centers and networks grow, thanks to CIO preoccupations with systems, applications and endpoints and perhaps more recently, tight budgets.  Many executives, however, are not aware of the often hidden sources of the operational costs of the network, which are often scattered (and hidden) among infrastructure budgets, help desk budgets, server teams, network teams and/or checklist committees.  

These costs grow every year under the canopy of business as usual while the common denominator is really an ironic inability to deliver automation where it could really make a difference... on the network.  That's right; the network may be one of the last bastions of manual labor in the modern enterprise; and it is a critical factor in the proliferation of many types of cloud computing.

While systems pros dream about the day when virtual machines can follow the moon (e.g. VMs move from one cloudplex to another chasing cheap evening electrical power around the world) networking pros are already under siege from more endpoints, more manual processes and more business operations risks.  It is this disconnect between the cloud computing buzz and the reality of life managing a network (where most endpoints don't yet move) that ignited the Infrastructure 2.0 conversation.

Dreaming Isn't Free
Many enterprise network pros will spend 30 minutes to an hour each on many of these common, routine kludge tasks; and perhaps wait for a few days each time for approvals from various teams or departments for a final go ahead. The idea of systems and endpoints going mobile is understandably more of a horror (given the network operations resources required to connect and keep up with static resources) than a dream for those responsible for maintaining the integrity of the network.

Those who grasp the potentially threatening gap between system and endpoint mobility and static networks requiring ever higher rates of manual intervention will either drive for core network services automation or keep the cloud genie contained within dozens (if not hundreds) of VLAN bottles, called virtualization-lite.  The latter scenario I've called The CIO Shell Game.

That's why I think cloud computing is really a code word for dynamic systems, storage and infrastructure. And you need all three. Cloud computing without a network capable of keeping up is merely a fantasy propped up out of frustration with the "kludgenomics" of today's increasingly expensive infrastructure.

As much as the headlines about the economy may convince us otherwise, cloud is more likely an artifact of rising management costs more than a weak global economy.  I think the vendors who minimize those costs via automation will win.  Those who simply try to discount their hardware as a way to make room for the operational pain will lose.

I am a senior director at Infoblox. You can follow my comments in real time at www.twitter.com/archimedius.