I know that many of you don't want to put your databases in the cloud. There are definitely concerns for many applications that might have identity, financial, medical, or other data. However there are many other types of applications that might make sense for cloud computing, and I am sure that many of you will encounter pressure to move to the cloud at some point in the future.
When you do, how do you determine if the cloud makes sense? Amazon has a nice whitepaper for NoSQL databases, which examines a scenario of varying traffic for a system whose usage peaks and then declines. I don't know how many of us have applications that follow this pattern of traffic, but I think there are plenty of our systems that are over-provisioned and have hardware sitting idle over time. Virtualization helps recover some efficiency from hardware, but the study was interesting to me in showing that the majority of the costs were in administration, redundancy, and support costs (power, space, cooling).
Whether or not you feel the assumptions made in the whitepaper are valid, there are some interesting ideas here that show where scale can be a huge benefit. Redundancy is very expensive for single systems, but when it is spread out over the large number of systems a cloud provider maintains, it's a minor cost. The reduction in administration costs can also be a significant savings, especially when you consider how hard it can be for a company to scale up, or down, it's staff to meet its needs.
I still prefer the idea of a private cloud inside a company where database services are provided, not database instances. I hope that SQL Server moves in this direction, giving us the chance to choose to manage data and consume a database service, leaving the management of the underlying instances to a specialized group that prefers managing the hardware and platform.
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