Is it inevitable that SQL Server will move to the cloud? In a word, yes.
But like absolutely everything else with databases, "it depends" applies as well. I am sure that we'll have support for SQL Server in the cloud, something much more advanced than the current state of SQL Server Data Services, before too many more releases.
Paul Nielsen says inside of 2 years, and in 5 we'll be leaning cloud first, local server second. I think that's a bit aggressive, and I do think Denis Gobo has some great thoughts about a few things that need to be done before SQL Server can move into the clouds, but it's going to get there for many people. Not everyone, but many people.
If you think about it, we are already moving towards a cloud type architecture. SQL Server has supported the idea of master/target servers for awhile, and with the addition of Policy Based Management, we are moving towards a way of telling SQL Server how we want it to work and behave and letting it then handle the details.
Much of IT is slowly moving down this path of requesting and using resources, and not necessarily specifying the details. We have implemented SANs that hide the disk architectures from us. For the most part they work, as long as those engineers in the deep bowels of SAN-storage land continue to replace disks as they fail.
In 2007 and 2008 is seemed many companies were also looking beyond individual servers by provisioning virtual machines and letting our hypervisors handle the details of getting the required resources to the calling server instance. There's still work to be done here to allow database servers to take advantage of this, but it's a matter of when now, not if.
Tomorrow we'll take a look at another aspect of SQL Server in the cloud.
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