When it comes to hype and buzzwords, nothing in the IT world has garnered as much attention as cloud computing. On one side, vendors and analysts are making breathless predictions about how the cloud will revolutionize IT, save the environment, save your company money, and put a smile on everyone’s face. On the other are nervous IT pros and server administrators who have legitimate concerns about security and identity in the cloud, and fear that the word cloud is CIO-speak for outsourcing. The reality is somewhere in the middle, and cloud computing shouldn’t be an all or nothing proposition.

Cloud computing is a transformational technology and is increasingly being used by consumers and businesses. This isn’t vendor babble or PR fluff: IBM recently reported that it expects its cloud computing sales to double in 2011 and to grow into a $7 billion business by 2015. In December 2010, federal government CIO Vivek Kundra announced a cloud-first initiative that requires government agencies to identify three “must move” services and migrate one to the cloud by early 2012. Streaming movie behemoth Netflix runs entirely on Amazon Web Services (AWS), millions of individuals are using cloud-based Google email and Google Docs, and cloud-based CRM provider Salesforce.com has become a staple of sales departments everywhere.

That doesn’t mean the public cloud is perfect for all IT applications, as there could be a host of reasons why a private cloud or more traditional IT solution may be a better option for your own organization. There are legitimate issues remaining with how the cloud can handle sensitive data, such as financial records, medical records, and other information subject to compliance and auditing regulations. That said, organizations like the Cloud Security Alliance are working with cloud computing vendors to make steady progress on those fronts.

Cloud computing critics will point out the well-publicized failings of the cloud, from Amazon’s multi-day service problems in April 2011, to the occasional Gmail outage. It’s important to remember that cloud computing is a technology in its infancy, and will have expected growing pains and issues. Let’s also remember that internal IT doesn’t always have a spotless 100 percent  uptime record either, as IT departments across the globe are continually dealing with software incompatibilities, hardware failures, and millions of other IT gremlins.

IT professionals are wise to take my colleague Michael Otey’s advice and evaluate vendor cloud computing claims with a wary, cynical eye. That said, I respectfully disagree with Michael on this point: Dismissing cloud computing as a fad or as a gussied up return to an earlier era of computing ignores the very real (and quantifiable) benefits that cloud computing can provide an organization that deploys it wisely. IT pros would be better served by proactively embracing cloud computing where appropriate, and vigorously defending the use of internal IT resources when that is a better strategy. The cloud is empowering users, not driving them away from computing resources. Let’s not forget how intimately connected the cloud is to mobile devices, a union that enables services and capabilities that were unthinkable even a few years ago.

Two of the most powerful aspects of the public cloud—the ability to only pay for the computing resources you use and the agility to quickly spool up additional IT resources as needed—make a powerful cost and operational argument for the cloud. If you’re a web-based ecommerce business, building out the expensive internal infrastructure to handle the spike of web traffic around busy shopping seasons is a waste, as all that expensive internal IT hardware will consume power and human capital while it sits idle 360 out of 365 days of the year.

So what is an IT pro or IT leader to do about cloud computing? I’d suggest you adopt a healthy amount of my colleague’s cloud computing cynicism, but simultaneously see what internal IT resources in your own organization could be good candidates for the cloud. An IT professional who fully understands the strengths (and weaknesses) of cloud computing can make the best decisions for the organization, become a broker and manager for evaluating cloud resources, and further the IT pro’s career in the process.

Have some cloud computing success (or horror) stories of your own to tell? Send your advice and suggestions to me via email at jeff.james@penton.com, and/or follow me on Twitter @jeffjames3.