In a sobering but optimistic keynote address at the Silicon Valley Leadership Group's Data Center Energy Efficiency Summit NetApp CEO Tom Georgens called on the industry to put faith into innovative approaches to IT infrastructure as competition becomes fiercer and IT budgets remain tight.

While promoting more shared use of all infrastructure components by applications through cloud-based architectures, Georgens said two fundamental questions about cloud computing had not been settled. Jury is still out on whether cloud-based models will really be cheaper in the long run than the traditional approaches.

The other big 'maybe' is security.

"I ask people all the time: why would anybody run their own Microsoft Exchange environment anymore? What value could an IT organization bring to an application like that?"

The primary response by NetApp customers that do run their own email remains the same: security.

Caveates aside, Georgens said the savings promised by cloud computing were attractive enough and many companies were moving toward more shared architectures.

"There really are technologies out there that fundamentally change economics of the data center," he said. "As we come out of this downturn there's a lot of old infrastructure." A lot of that infrastructure was based on the old model of "application-based silos," where each application had its own server and its own storage unit, with network being the only shared component.

"The model is moving away from the silo and more towards a horizontal approach." Most common version is the private or internal cloud. Many are also looking at external cloud services to delegate unexpected spikes in demand to.

Over the past year Georgens observed an evolution of thinking about IT spending by organizations spurred by the economic downturn. One year ago NetApp was having a hard time closing deals as companies held onto their money. Then the purse strings loosened somewhat but the budgets were focused on short-term investments because of economic uncertainty.

Today, widespread interest in cloud computing indicates more long-term IT strategies as organizations are under pressure to increase utilization of their IT assets and recognize that cloud computing has the potential to help them use more of what they have.

One of the cloud's core enablers is virtualization and server virtualization has implications for storage - NetApp's primary market.

"Once the applications are mobile than the entire infrastructure changes," Georgens said. "As the applications move around they still need to have access to the storage (and) the data itself needs to be mobile as well."

Besides enabling data mobility, NetApp plans to continue playing in the storage optimization space through technologies such as deduplication and thin provisioning.

Sunnyvale, Calif.-based NetApp - a $3.5-billion organization as of April's end - employs about 8,000 people worldwide. In February, Fortun gave NetApp first place in the magazine's top 100 list of companies to work for.