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While the clients in the cloud will surely be pipsqueak machines, such as minimal PC type machines (of whatever type, even cell phones, glorified washing machines, and the like (remember all those available IP addressed under IPv6), some other machines will have to be more than a bunch more PC type machines.

There are really many forces at work here and many permutations regarding what it means for an IT system to migrate "to the cloud":

* An established small to mid size company might decide to migrate its on-premise proprietary system to some type of standardized/metered cloud based system managed by a third party with the hardware itself owned by the third party and minimal modifications made to the software. In this case, the company will likely have to adapt its existing workflows and processes based on the standardized software or operate within whatever the limits are for customization/configuration of a standardized system. The cloud based system could be either dedicated or shared, both in terms of hardware and software. The motive for such a migration would be to reduce the cost of IT personnel and, possibly, to standardize a business process in a more efficient manner.

* A start up with NO existing systems would likely decide to establish its important systems in a cloud based solution operated by a third party since there are no legacy issues to deal with and cost is likely to be a major consideration. Customizations to software would likely be minimal - the motivation would be to not have to hire IT staff to begin with and to not have to make up front investments in hardware.

* A large established enterprise most likely has an on-premise system with either proprietary or heavily customized commercial software that has been in place for years or decades and incorporates long established business processes. Such a business might establish either a private cloud or look to a third party provider and in either case would almost certainly have both dedicated software and hardware installed with some degree of customization even if business processes can be simplified or standardized (which is hard to do). The main motivation here is to lower IT costs and possibly simplify outdated processes. Heavy use of consultants/experts would be needed to make this happen initially and probably to monitor and maintain the system after installation especially if in house IT staff is cut as part of the cost saving process.

Note that in most cases, a natural constituency exists to oppose moving systems to a third party operated cloud: The IT department. Even in cases where some IT staff is retained, the CIO sees his empire shrink and the relative importance of his function diminish over time, replaced by expert consultants in many cases.

I agree that the opportunities for trusted consultants to step in and guide the process exists and IBM is likely well positioned in this regard.

IBM definitely deserves some attention at this point given Buffett's clear endorsement and the relative underperformance of the stock recently. The overall valuation seems attractive as well.
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