“Think of a technical writer at a laptop computer in a coffee house. This laptop may contain all the resources available to complete the project—a word processor, page-layout program, diagramming tools for graphical insets and illustrations, and conversion tools for XML and PDF—all in the self-contained universe of that laptop, which may cost US$2,000 and have similar capabilities to a desktop machine. The software could cost as much as the system itself, resulting in a US$4,000 total investment.
In contrast, that same writer in the same coffee house may work on a thin client—a much smaller, resource-constrained system that literally costs one-tenth as much as the expensive laptop. Thanks to the software and storage available in the cloud, this thin client may have no moving parts, a very simple processor, and just enough resources to run a modern Web browser and a fast network connection, but the writer has as many—possibly even more—resources at hand than the local user, as well as the safety of knowing that his or her work will survive even if the battery dies or the laptop itself is stolen.”
That is a quotation from “Cloud computing with Linux thin clients –
Users and the environment benefit from Linux-based cloud computing systems”.
That is a powerful image that IBM shares with developers and customers the ordinary user can understand. It does beg the question of the cost of licensing on the cloud, but licences in bulk are cheaper and if FLOSS is used, negligible. In education the small size of a thin client lashed to the back of an LCD monitor is an added bonus. It is so expensive to try to obtain the raw power of a good server on each and every client. It is so efficient to share that power over the network.

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Doing so requires that you submit your information to a third party (unless you run the server at home, which would be awesome) which is my main reason for not wanting to move to the cloud in addition to network vulnerabilities.
We submit out information to a third party all the time:
Clouds are just an extension of that process of trust and responsibility. Many large businesses will create their own “private cloud” in a similar fashion to WANs and VPNs. I think small and medium sized businesses will lack the scale to do that and rely on third parties. It’s good.
IT gives to much trust to companies like M$. They would be much better off trusting companies not out to mess with competition illegally, for instance. Lock-in could be a serious complication for the cloud, right after security. If you commit to a provider of cloud services, can you easily change? We need to make sure the provider uses open standards so we can.
On the security issue, it may be possible to do a lot about that with encryption and javascript or java. In some cases the data the third party sees could be encrypted to him and not readable. That should be doable for storage and backup services. It might be possible for word-processing too if the actual editing is done on the client machine. I have been playing with TinyMCE and can see its utility. I sent the boss a memo created with it just fine.