At a briefing organised by Accenture in Dublin earlier this week, representatives from Amazon, Google, Salesforce.com and Microsoft offered a realistic appraisal of the technology industry's latest buzzword, writes GORDON SMITH

Cloud computing takes its name from the IT industry's use of a "cloud" as shorthand to represent the internet or a large network, because all of the data processing and storage takes place at remote data centres and is then delivered through the internet – rather than people acquiring proprietary software packages.

To date, cloud computing is more closely associated with consumer applications like Google's Gmail or websites such as the Facebook or Flickr.

But this is changing: Google is aggressively targeting business customers, while online retailer Amazon rents spare computing capacity on its systems to other businesses.

Microsoft is building several data centres worldwide – including one in Dublin – to provide cloud-based services.

Paul Daugherty, Accenture's chief technology architect, said the model was suitable for businesses.

"Cloud computing is relevant to the enterprise," he said. "We're on a journey to some new computing platforms that will radically transform the way that we deliver services within the enterprise."

For businesses, the main benefit of cloud computing is saving money, since it operates on a fixed-price model whereby companies pay a set monthly charge only for the computing power they consume.

"There are some compelling cost-reduction arguments with cloud computing when it's applied in the right way," said Daugherty.

Iain Gavin, head of web services with Amazon Ireland, said the price of cloud computing was being driven down all the time. "You can do a proof of concept for probably less than you would spend on a cup of coffee," he said.

Using Amazon's cloud service, Pfizer was able to perform the computing-intensive task of protein profiling analysis for just $350 (€250), as opposed to the thousands of dollars it would have cost to buy and operate the systems itself.

With cloud computing, the complexity of providing IT services is removed from the user, said Robert Whiteside, head of Google's enterprise business in Ireland, the UK and Benelux. "Both the data and the applications reside in the cloud in a data centre, accessible wherever there is an internet connection," he said.

"New capabilities are delivered faster in the cloud. Everyone gets the same technology at the same time. You don't have to wait a year, three years or five years for the next release."

Some concerns remain, however, and any serious system crash could set back cloud computing's efforts to win mass appeal. Amazon, for example, suffered a brief outage after a lightning strike at one of its US data centres last month, disrupting services for several hours.

Daugherty said transparency would be important for customers and welcomed moves by some providers to publish real-time system performance and security information on their websites.

Despite such assurances, Beat Schwegler of Microsoft's early adoption projects group said he did not anticipate that all customers would switch to the cloud straight away. "This is not going to be a 100 per cent shift," he said.

Daugherty agreed: "Sometimes we get a little too excited about how fast it's going."

He said a more likely outcome would involve businesses accessing some of their software applications through the cloud.