I hate technology buzzwords. And when I hear one, my impulse is to bat it away like an annoying mosquito. But before you do the same about one of this year's hot buzzwords -- cloud computing -- give it a little more thought.

Cloud computing, a concept that can be as airy as its name suggests, is piquing the interest of forward-looking IT execs and attracting sizable investments from players like IBM, Amazon, Akamai, Sun, EMC and Salesforce.com. Sure there's a big helping of hype and plenty of reasons to be skeptical, but a growing number of startups -- and a still small number of enterprises -- are moving applications and infrastructure into a third party-provided cloud.

What's driving cloud computing? Out-of-control costs for power, personnel and hardware, plus a shortage of space in datacenters and a desire to speed up and simply network deployment and management. What's enabling it? Nearly unlimited bandwidth, increasingly sophisticated virtualization technologies and multitenant architectures, and the availability of extremely powerful servers.

The emerging resource cloud

Cloud computing is an option when there's a need to complete a resource-heavy project without buying hardware or hiring personnel that won't be needed later. The New York Times, for example, used Amazon Web Services (EC2 and S3) to generate PDFs of 11 million articles in the paper's archives.

"Honestly, I had a couple of moments of panic. I was using some very new and not totally proven pieces of technology on a project that was very high profile and on an inflexible deadline. But clearly it worked out ... I can't imagine how we might have done it without Amazon S3/EC2," Derek Gottfrid, senior software architect for the Times, wrote in his blog.

The Schumacher Group, a US-based company that supplies temporary emergency room staffers, needed more flexibility to add resources for satellite offices and wanted to decentralize part of its operation as a hedge against hurricane-induced outages. Schumacher combined a custom application with a Salesforce.com CRM application to handle thousands of contracts among his company, the hospitals and the doctors -- and he runs it on the Salesforce infrastructure. The savings in avoided operational and hardware costs were significant.

Rather than buy enough servers and other infrastructure to meet peak needs, Powerset, a startup building a natural language search engine, fills the gap with Amazon's EC2 and pays for the resources as it uses them.