But then again....

the way that the Cloud is described in the article is based on using it like a traditional outsourcing environment, with all the existing limitations of the an existing outsourcing style deal e.g. customer only gets refunded a proportion of the monthly fees for missing a service level.

A limitation of outsourcing is that either the custome or the outsourcer needs to provide the DBAs, System Administrators, etc to manage the in-house systems. Cloud however removes that requirement in as much as the outsourcer whilst having to provide the resources only needs to do it for the datacentre instance and not for every single customer. The customer sees lower costs as does the outsourcer which makes the deal beneficial for both.

SLAs are not an issue, if you look real close at SLAs they are predominantly for availability, accessibility and or performance, uniquness is something driven by customer pride as opposed to reality since all customers want 99.999 uptime. However, the ideas around insurance do offer suppliers the chance to make service credits for misses SLAs more tightly aligned with the business lost today and that is something even traditional outsources may want to look at.

The other big advantage of the Cloud concept is that it offers the chance to bring down the costs of business continuity. If the application is available from two Cloud datacentres then the if only one instance is 'live' then the charges for the reserve would be lower as the resources consumed would be minimal. Business continuity today is expensive as firms have to pay for and maintain two critical systems even if only one of them is running.