Cloud computing may arguably be the biggest computing advance in the 21st century. And for good reason: thanks to the cloud, a good amount of the staggering computing power that’s coming online is available to just about everyone.

But like all good things, the cloud is often the subject of hype and its advantages can be oversold.

When it comes to cloud myths, here are five of the biggest that, when treated as absolute truth, can be very harmful.

The cloud makes everything easier.

Thanks to cloud hosting providers like Amazon, companies can fire up servers on demand with a few keystrokes (or none at all). That might give the impression that hosting applications in the cloud is easier, but the cloud creates its own set of challenges. For instance, security is an area for concern, and the cloud has a number of performance characteristics that savvy companies will want to take into consideration before deploying their applications.

The cloud is most cost-effective.

Many companies have been led to believe that the cloud is a center for cost savings. To be sure, it can be. If you’re a fast-growing startup, for instance, not having to buy a bunch of servers can significantly reduce your CAPEX needs.

But paying as you grow in the cloud doesn’t mean that the cloud is more cost-effective in the final analysis. For many small businesses which realistically won’t see their infrastructure needs shoot up overnight, a handful of dedicated servers will provide far more bang for the buck than cloud servers. And for larger businesses, there can be advantages to hosting applications outside of the cloud as well.

Zynga provides an interesting case study of the latter. The social gaming giant starts games in a public cloud when it doesn’t know what they’ll need resource wise and then moves them into a dedicated environment (which it calls zCloud) once it has a better idea of how many resources they need.

The cloud handles scaling.

The word “scaling” comes up a lot in discussions of the cloud and for good reason: having the ability to rapidly provision new infrastructure quickly can help a company scale its web applications more when the need arises.

But ‘help’ is the operative word. Having for all effective purposes unlimited access to infrastructure is great, but that doesn’t mean that your applications are instantly and infinitely scalable. The biggest challenges to application scalability are typically related to application architecture — something the cloud doesn’t solve.

The system administrator is obsolete.

Just because you don’t have physical hardware sitting in an owned datacentre and your developers can programmatically provision infrastructure doesn’t mean that you don’t need a good system administrator. The cloud may change some of the responsibilities of the system administrator, but make no mistake about it: in most cases, a great developer does not a good sysadmin make. In other words, rumors of the death of your system administrator are wildly exaggerated.

The cloud is the future.

The cloud is a big part of the future (and the present), but it isn’t the end all and be all of computing. The cloud may eventually become the technology toolbox’s equivalent of the hammer, but organizations should remember that not every computing challenge is a nail.