Virtualization allows software and hardware to operate independently, at least somewhat. As long as the server can cope with the load you can run many servers on one device and they can be moved easily between devices.
But even with virtualization the server is still tied to one or more devices. It is not (yet) possible to consider all physical devices together as a resource pool and let them share memory and computing power. This is where Cloud Computing is more advanced and can be considered the next step forward.
Currently Cloud Computing can only be used when you host your servers with a Cloud Computing provider. The pioneers where Amazon, Force.com from Salesforce and App Engine from Google but today there are many more, like Mosso from Rackspace and GoGrid.
Microsoft and Ubuntu both have announced to provide Cloud Computing functionality in their next server version so that you can run your own Cloud in house. Microsoft is based on its Azure .NET based environment and Ubuntu on Amazon’s EC2 platform. VMware is also promising Clouds with it’s Virtual Data Center Operating (vSphere) system and the vCenter suite for management for management of cloud infrastructure and applications.
In the near future you will be able to move your servers between outsourced and in in-house Clouds. But they will also form a new set of competing technologies: already there are EC2, Force.com, Azure, and App Engine and they all use different API’s and languages. To be efficient and flexible the in house and outsourced platforms should be compatible so that you can mix and match.
But if you do it brings lots of flexibility. Imagine having to set up a new server which you want in house, but you do not have the computing power available you need. Just set up the server on the outsourced environment, take your time to add additional computing power to your in house cloud and then move the server to your in house environment.
