Over the past few weeks, the idea of moving data off of desktops and locally-controlled database servers and "into the cloud" (onto shared data hosting services like Amazon's S3) has been gaining more attention. A guy named Nicholas Carr went so far as to predict the demise of the IT department as businesses essentially outsource their data processing/data retention (NetworkWorld, 1/7/08).
There's no doubt that individuals store more data online these days than they used to because of the rise of applications like Facebook, Flickr, and Google Calendar. Any data that has a social aspect to it gains value by being "out there" for others to view and interact with.
There are also business processes that involve collaboration with other business partners, where arrangements are made to exchange information or tangible goods via a buyer/seller dynamic. Again, it makes sense that the data and even the applications that power such collaborations could be managed and hosted by a third party.
But there will always be a desire to keep certain data close to the vest, even if that means maintaining an internal hardware and network infrastructure. Colleges and universities are not going to outsource their student data to a third party, and medical institutions are obligated by law to safeguard medical information. Banks will probably take a pass on shared data hosting as well. Even if cloud computing becomes more accepted and reliable, there will always be groups and individuals unwilling to give up that control despite any cost savings.
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