Economic Recession: Good or Bad for Cloud Computing?

I heard someone assert a week or so ago that Gartner Group had stated that the recession is going to be bad for cloud computing. Since this seems counter-intuitive (because offerings that are, at least, putatively less expensive should be more attractive in difficult economic times), I decided to do some searching to find the statement and understand the context. What I found was ... nothing. No evidence that someone from Gartner put forth that opinion.

Nevertheless, there is something to be examined in this question: is the recession good or bad for cloud computing? Where you come down on that question depends a great deal on how you think most IT organizations will consume cloud services. By cloud services, I refer to the characteristics of cloud computing (a good definition is presented by the UC Berkeley RAD Lab, which was discussed in this blog posting); in other words, how will IT organizations achieve an infrastructure that scales easily, can be reconfigured in minutes rather than weeks, and has a transparent cost based on usage?

One side of the debate is convinced that most IT organizations will opt for internal clouds. These are "cloudy" environments that are implemented within a company's own data center(s). The case for this perspective is often put with an argument that, before IT orgs reach out to external cloud providers, they'll want to get better use out of the equipment they already have. A number of major technology vendors are full-bore behind this approach, including IBM, HP, and EMC. And now a new company threw its hat into the ring: Cisco. Each of these companies provides hardware, software, and services designed to transform data centers from siloed, immalleable, opaquely priced compute environments to agile technology foundations that can easily provision new resources, orchestrate entire application stacks across multiple servers, and provide transparent (and low) pricing to compute users. What's not to like?

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