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Google this Friday will host for lobbyists, congressional aides and journalists in the Washington D.C. area a talk about cloud computing at which it will release a new Pew Internet and American Life survey of consumer attitudes toward the cloud. Google has obviously launched these D.C.-area talks as a way to help educate regulators and lawmakers about white spaces, online privacy and other topics near and dear to its interests.

Still, I am curious to hear what the Pew survey says consumers think of the cloud. I would have guessed they don’t think much about it all, unless it’s bringing rain. I’m also curious as to what Google thinks regulators should focus on when it comes to running pools of virtualized servers. Bandwidth improvements and ensuring Network Neutrality are one obvious issue for cloud purveyors, other regulation that should be talked about is how laws and regulations govern the physical location of certain data. Indeed, one interesting side note to Google’s patent for running data centers on the high seas is the lack of jurisdiction in international waters.

On the consumer side, a fair issue to consider is how consumer content stored in such clouds can be used. Witness the kerfuffle over Google’s terms of service regarding Chrome, which tried to claim the right to use  any content uploaded or displayed via the browser. But when storing files and data in a cloud, ownership and usage rights are essential, as are clear policies that lay out how such content might be accessed, tracked and monitored. Another issue is whether or not such data could ever truly be deleted from clouds, as former Facebook users had discovered. Not all of these issues require regulation, but it’s worth educating lawmakers about them in advance of more services being offered via the cloud.

image courtesy of Google

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It looks like after Amazon, a mere book retailer, showed them the way, all the technology powerhouses have fallen in love with cloud computing. Hewlett-Packard, Intel and Yahoo earlier this week said they’ve teamed up with three universities to create a cloud computing testbed, and Michael Dell talked about his company’s cloud computing plans with me in a recent interview as well.

Perhaps that’s why it came as no surprise when Big Blue sent over a press release outlining their plans to build a data center in North Carolina that will be the underpinning of their continuing cloud computing efforts. IBM will construct a $360 million, state-of-the-art data center at its facility in Research Triangle Park, N.C., and use it to sell cloud-computing services to its clients – mostly large corporations. The first phase of the new North Carolina facility will be 60,000 square feet and will use:

High-density computing systems utilizing virtualization technology, which reduces energy costs by running multiple software applications on the same servers. This technology, along with IBM’s Cool Blue portfolio of energy efficient technologies and a modular data center design will allow the RTP facility to support 2.5 to three times the amount of client demand in the square footage of an industry average site. The data center’s mechanical system design is 50 percent more efficient than the industry average, equating to a reduction of approximately 31,799 tons of carbon dioxide emissions a year.

Today, in addition to North Carolina, IBM also announced that it’s unveiling its newest cloud-computing facility, this time in Tokyo. IBM says it has cloud computing efforts already under way in Dublin, Johannesburg, the Netherlands, as well as in the Chinese cities of Beijing and Wuxi.

Now I am a little hard-pressed to buy into this whole “cloud computing” message from Big Blue. From the way I see it, the only IBM effort that qualifies as a “cloud computing initiative” is their partnership with Google, which involves the two companies spending $100 million to offer computing resources to the academic community.

Don’t get me wrong: If there is one company that can chant the cloud mantra, it is the original proponent of time-sharing, IBM. Except that in the days leading up to our Structure 08 conference, Dr. Jay Subrahmonia, director of advanced customer solutions at IBM, told Stacey that the company wasn’t in the business of operating clouds. Sure, they’ve hosted them for one or two customers, and they’re happy to build them, but she said IBM was more interested in selling hardware to companies or organizations that will run them themselves.

Yet suddenly we have multiple clouds? I wondered if IBM was repackaging data centers as “cloud computing” and further bastardizing the term. When I asked them if this was the case, a company spokesperson emailed me back with the following response:

We’ve tried to only talk about centers and clients that are legitimate cloud services and environments. In Tokyo tomorrow clients can run and test in an operational cloud environment. And, specifically for North Carolina, this is being built from the ground up based on cloud principles being developed by the 200 full time researchers we’ve dedicated to cloud since the initial IBM-Google academic initiative last year. This is bearing fruit; the center in NC will be able to support 100,000 processing cores.

He also explained that the billing of clients is very different from the data center hosting. These contracts are short; they are not multiyear deals. “But we don’t bill ‘by the minute’ as others do,” he said. “Specific pricing varies heavily based on what we are doing with clients.” He went on to explain how IBM defines clouds, which is in line with our own definition of cloud computing.

The centers we are announcing operate in a full multitenancy model. They virtualize server, storage, and network resources and give end users the ability to reserve secure, virtual units of these resources via a self-service Web 2.0 portal. We can “dispense” pre-built virtual servers based on virtual machine images of anything ranging from bare-bones operating systems (IaaS) to empty middleware containers to full J2EE applications on WebSphere and DB2.

To sum it up, IBM’s decision to move computing into the “clouds” reflects the fact that the business of selling infrastructure hardware is changing fast, and it isn’t impossible to imagine a day when a substantial portion of hardware infrastructure is sold as a service.

Many entrepreneurs today have their heads in the clouds. They’re either outsourcing most of their network infrastructure to a provider such as Amazon Web Services or are building out such infrastructures to capitalize on the incredible momentum around cloud computing. I have no doubt that this is The Next Big Thing in computing, but sometimes I get a little tired of the noise. Cloud computing could become as ubiquitous as personal computing, networked campuses or other big innovations in the way we work, but it’s not there yet.

Because as important as cloud computing is for startups and random one-off projects at big companies, it still has a long way to go before it can prove its chops. So let’s turn down the noise level and add a dose of reality. Here are 10 reasons enterprises aren’t ready to trust the cloud. Startups and SMBs should pay attention to this as well.

1. It’s not secure. We live in an age in which 41 percent of companies employ someone to read their workers’ email. Certain companies and industries have to maintain strict watch on their data at all times, either because they’re regulated by laws such as HIPAA, Gramm-Leach Bliley Act or because they’re super paranoid, which means sending that data outside company firewalls isn’t going to happen.
2. It can’t be logged. Tied closely to fears of security are fears that putting certain data in the cloud makes it hard to log for compliance purposes. While there are currently some technical ways around this, and undoubtedly startups out there waiting to launch their own products that make it possible to log “conversations” between virtualized servers sitting in the cloud, it’s still early days.
3. It’s not platform agnostic. Most clouds force participants to rely on a single platform or host only one type of product. Amazon Web Services is built on the LAMP stack, Google Apps Engine locks users into proprietary formats, and Windows lovers out there have GoGrid for supporting computing offered by the ServePath guys. If you need to support multiple platforms, as most enterprises do, then you’re looking at multiple clouds. That can be a nightmare to manage.
4. Reliability is still an issue. Earlier this year Amazon’s S3 service went down, and while the entire system may not crash, Mosso experiences “rolling brownouts” of some services that can effect users. Even inside an enterprise, data centers or servers go down, but generally the communication around such outages is better and in many cases, fail-over options exist. Amazon is taking steps toward providing (pricey) information and support, but it’s far more comforting to have a company-paid IT guy on which to rely.
5. Portability isn’t seamless. As all-encompassing as it may seem, the so-called “cloud” is in fact made of up several clouds, and getting your data from one to another isn’t as easy as IT managers would like. This ties to platform issues, which can leave data in a format that few or no other cloud accepts, and also reflects the bandwidth costs associated with moving data from one cloud to another.
6. It’s not environmentally sustainable. As a recent article in The Economist pointed out, the emergence of cloud computing isn’t as ethereal as is might seem. The computers are still sucking down megawatts of power at an ever-increasing rate, and not all clouds are built to the best energy-efficiency standards. Moving data center operations to the cloud and off corporate balance sheets is kind of like chucking your garbage into a landfill rather than your yard. The problem is still there but you no longer have to look at it. A company still pay for the poor energy efficiency, but if we assume that corporations are going to try to be more accountable with regard to their environmental impact, controlling IT’s energy efficiency is important.
7. Cloud computing still has to exist on physical servers. As nebulous as cloud computing seems, the data still resides on servers around the world, and the physical location of those servers is important under many nation’s laws. For example, Canada is concerned about its public sector projects being hosted on U.S.-based servers because under the U.S. Patriot Act, it could be accessed by the U.S. government.
8. The need for speed still reigns at some firms. Putting data in the cloud means accepting the latency inherent in transmitting data across the country and the wait as corporate users ping the cloud and wait for a response. Ways around this problem exist with offline syncing, such as what Microsoft Live Mesh offers, but it’s still a roadblock to wider adoption.
9. Large companies already have an internal cloud. Many big firms have internal IT shops that act as a cloud to the multiple divisions under the corporate umbrella. Not only do these internal shops have the benefit of being within company firewalls, but they generally work hard — from a cost perspective — to stay competitive with outside cloud resources, making the case for sending computing to the cloud weak.
10. Bureaucracy will cause the transition to take longer than building replacement housing in New Orleans. Big companies are conservative, and transitions in computing can take years to implement. A good example is the challenge HP faced when trying to consolidate its data center operations. Employees were using over 6,000 applications and many resisted streamlining of any sort. Plus, internal IT managers may fight the outsourcing of their livelihoods to the cloud, using the reasons listed above.

Cloud computing will be big, both in and outside of the enterprise, but being aware of the challenges will help technology providers think of ways around the problems, and let cloud providers know what they’re up against.