Matt Asay hits the nail on the head in a "cloud" article that perfectly matches my own observations. It's not functionality that will drive or kill "cloud computing" adoption, it's data security. GIS is no exception. Cloud computing and open source (which often go hand in hand) are a hard sell to local governments, which must meet a higher standard of reliability and data security than a community mapping project.

"There's a big disconnect between what the media likes to write about and what the enterprise likes to buy."

and

"...no matter how much the media and Google sell the cloud, it remains an add-on to corporate computing, not a replacement strategy."

Full article.