What are "Clouds" and are they necessary?

I was recently at an event put on by a vendor where the topic of discussion was "Are Clouds Necessary". We started with a brief discussion about what clouds really are in the first place. I mean, it is a pretty vague term to begin with so it was important to understand what the audience defined as a cloud.

It was interesting to hear everyone's take. One person said a cloud was a way he could continue to keep his costs down, and still provide great service to his company. He couldn't afford to hire and train IT staff to manage the ever growing complexity he attributed to modern IT. Another user defined a cloud by a more literal definition, vapor. Clearly we had a cynic. Someone even went to Wikipedia on his phone during the discussion, and when his turn came he read off the exact definition of cloud computing. Why bother talking about clouds when you can reach into one and pull out the answer?

To me a cloud starts with virtualization at every layer.  Virtualization leads to a whole slew of efficiencies, but speed to market is a key differentiator in my book.  Just how quickly can you provide services to your organization?  If a business unit needs to bring in a new application they typically need their own systems to test and eventually deploy. What is your average length of time to make that happen? A user in my Cisco UCS class said it takes his company about 4 months. We have an SLA for 10 days on new server request, but the fact is systems can be deployed, configured, and turned over to the application owner in about an hour.  We're kind of like LensCrafters in that regard.  The SLA is really to give our team a buffer since we are lean, working on other projects, and putting out fires on a daily basis. In other words, we are a typical IT department.

The reason we are able to deploy systems so quickly is because we have built a private cloud. When that business unit wants to bring in a new application, or enhance a current one, we still do it the same way. We calculate CPU, memory, and storage requirements and purchase hardware as necessary. However what most of them don't realize is they usually aren't buying stand-alone physical systems sucking down power, demanding cooling, and taking up expensive space in the datacenter. They are buying resources in the cloud. Even when we do need to procure physical hardware all that does is allow us to expand our existing cloud architecture. That in turn enables us to support more systems, more applications, and generally gives the business an incredible degree of flexibility.

Something I didn't mention earlier about that user in my UCS class, the one who said it takes his company about 4 months to provision new systems, was the fact that he didn't seem impressed by UCS. So much so that he didn't even show up for the second day of training. Another interesting tidbit is that he works at a competitor of the company I currently work for. So here we are moving forward, expanding our private cloud by leveraging some of the most cutting edge technology available, and making our company more agile, efficient, and doing it all at a reduced cost. Our competition is not. Now you tell me, are clouds necessary?