I think it’s still going to be a slow process. Not everyone will switch over, and we have to get over a huge "trust issue". I still have clients who are working on SQL Server 2000 boxes, and using Windows XP for desktop use. Some clients refuse to upgrade from SQL Server 2005 to SQL Server 2008, unless they see a lot of "evidence" that SQL Server 2008 is reliable as a rock (or something like that).
The adoption process needs not just the technological backbone – robust architecture, reliable services, no downtime. For SQL Server in the Cloud to be accepted (just like anything else), the way we think about data and infrastructure needs to change too. At this point, many business still feel "safer" when their data sits on their local boxes or on boxes within their own networks. In addition, SQL in the cloud needs to be secure enough to meet legal trictions and regulatory compliance procedures.
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