We examine how the biomedical informatics (BMI) community, especially consortia that share data and applications, can take advantage of a new resource called ''cloud computing''. Clouds generally offer resources on demand. In most clouds, charges are pay per use, based on large farms of inexpensive, dedicated servers, sometimes supporting parallel computing. Substantial economies of scale potentially yield costs much lower than dedicated laboratory systems or even institutional data centers. Overall, even with conservative assumptions, for applications that are not I/O intensive and do not demand a fully mature environment, the numbers suggested that clouds can sometimes provide major improvements, and should be seriously considered for BMI. Methodologically, it was very advantageous to formulate analyses in terms of component technologies; focusing on these specifics enabled us to bypass the cacophony of alternative definitions (e.g., exactly what does a cloud include) and to analyze alternatives that employ some of the component technologies (e.g., an institution's data center). Relative analyses were another great simplifier. Rather than listing the absolute strengths and weaknesses of cloud-based systems (e.g., for security or data preservation), we focus on the changes from a particular starting point, e.g., individual lab systems. We often find a rough parity (in principle), but one needs to examine individual acquisitions-is a loosely managed lab moving to a well managed cloud, or a tightly managed hospital data center moving to a poorly safeguarded cloud?