A fast-growing number of storage and software applications are moving to "the cloud" - offsite services provided by the likes of Amazon, Google, Microsoft and other major contenders.

With an eye on being the lowest-cost cloud competitor, the Amazon Elastic Compute Cloud (EC2) gives customers the chance to bid on unused computing capacity to save money on low-priority work that can be deferred until computing demand and prices are low.

In its annual "Top 10 Strategic Technologies" list, analyst firm Gartner proclaimed that cloud computing is the number one technology.

The steady migration toward cloud computing is driven first by cost, and then by quality of service. The immediate push comes from the economic downturn and the need to cut costs. The shift is massive, both in physical scale and economic impact. It allows businesses to turn off their own expensive, dedicated systems.

With the emergence of the cloud model and software-as-a-service (SaaS), large systems vendors like IBM, HP and Dell have been buying up service companies. It's changing the image of what each company really provides. Midst these big changes, it's uncertain who will emerge as real winners.

There will be many short-term pricing benefits and increased service. But the longer-term effects may not be quite so good for users. The gurus are warning that there will be some kind of catastrophe before too long, either service-outage or security-flaws. But, of course, these things can happen with dedicated systems too.

How secure is cloud computing? Clearly the major providers are paying a lot of attention to this key point because they are investing a lot and don't want to risk their reputation. But it remains perhaps the single biggest negative element in the switch to cloud services. Some companies hedge their bets by moving to more than one cloud provider.

Users have been thinking about these kinds of questions for months as they attempt to clean up their data centers by outsourcing some applications and virtualizing others.