It would be hard not to have noticed just how many information technology stories have been in the news lately – Wikileaks, the use of Facebook and Twitter by protesters throughout the Middle East, The Social Network being nominated for best picture in both the US and the UK, Mark Zuckerberg named Time magazine's 'Person of the Year', rumours of multi-billion-dollar IPOs, the recent triumph of IBM's Watson on the TV quiz show Jeopardy, and a series of thoughtful articles about the meaning of all this in high-brow publications such as The New Yorker, The Atlantic and even Foreign Affairs.

When people talk about moving the ‘legacy’ to the cloud, they often mean replacing the physical infrastructure of an application with equivalent on-demand resources from a cloud provider. It sounds like a straightforward switch in order to gain utility pricing and scaling capabilities. But, is this perception realistic?

I was recently at a private conference of CIOs when in the midst of discussing activities such as CRM to ERP, it became clear that not only did everyone understand these applications, but also that every company had them. Almost all of those companies have expensive customization programmes in place, tailoring these systems to fit their needs. This behaviour is puzzling, but to explain why, we'll need to first look at the concept of business evolution.

All business activities commoditize – that is, they evolve through a common pathway from their innovation, to custom built examples, productization and eventually commodity provision.  It is in this latter stage that utility services can appear.  IT is no exception to this evolutionary pathway and cloud computing is simply a popular term to describe a wide range of IT activities that are currently evolving from products to utility services.