I don't think its an issue with the cloud. I think it is an issue where people tend to think they are more ready for primary failure of their services and hardware than they actually are.
I have to agree, they have a lack of a proper Disaster recovery process. Most places i have worked really fall down on this. And the big failure is that even if they do have DR in place they fail to test it and do a dry run and see if it works properly.

That was a good article. The only question is, are people going to learn from it?
No, not while the accountant are in charge anyway. I see more and more outsourcing going on because on the surface it looks cheap to the bottom line, and generally it doesn't work very well.

My work has recently outsourced a development project to build an entirely new product, and i was speaking to one of testers yesterday who told me that this project is supposed to be complete in the next week, yet he couldn't even install it until this week, and virtually everything he does outside of expected process breaks.

I have yet to see a really good outsourced project.

As the original post was about Cloud computing i will answer that too. It seems to me that Cloud computing could work in some circumstances but i personally would be worried about using the Cloud for any major size product at the moment until it has more of a track record, and until i actually see some big companies show it working on there products.