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On-demand is an exercise in utility

On-demand is one of this year's hottest trends according to the Wall Street Journal and Gartner Inc., and that's without being a mainstream member of the tech culture or even having a clear definition. Once everyone can define it and is doing it, revolution could come to the data center -- will you be ready?

Utility computing.

It's bold. It's hot. It makes sense. It's something that Gartner Inc. analyst Tom Bittman says CIOs need to stay on top of unless they want out of the IT business.

Will the last person who's confused by it please switch off the lights?

Utility, or on-demand computing, is one of those uber-trends with a definition that varies depending on who's defining it. But at its very core, utility computing is the concept of using computing power like you would any utility (electricity, water, natural gas, and so forth) -- you flick on the switch when you need it, use only as much as you need, and you pay as you go.

And if you leave the line open, your boss can say, "Are you trying to compute the whole neighborhood?"

Taking the bandwagon to Trendville

And while vendors and customers confuse one another as they try to nail down a definite denotation, another aspect of utility computing is patently clear -- it's a bandwagon that's filling up fast. IBM is the market's early leader, and other industry heavy hitters, like Oracle, Hewlett-Packard, EMC and Sun Microsystems, are offering or plan to offer on-demand computing capabilities (early customers include American Express and J.P. Morgan). And there's no shortage of smaller firms that are throwing their chips into the game, too -- SevenSpace Inc., Totality Corp., and Opsware Inc. are just three fish in the growing sea.

All of them hope to cash in on the trend -- expected to become a $25 billion market by 2006, according to Gartner -- and all dangle the carrot of cost savings and tout the benefits of subscribing over owning.

"Utility computing is the next bold promise in the IT industry that goes beyond the MSP [management service provider] and ASP [application service provider] models," said Jeff Kaplan, managing director of ThinkStrategies, a consulting firm based in Wellesley, Mass. He added that many former ASPs and MSPs now call themselves utility computing providers and provide more inclusive computing services than their more single-focused predecessors.

If this trend really lives up to its potential, your IT department may never be the same. Think of the data center as the Bastille and utility computing as the mob -- it represents a revolutionary change in the traditional data center model, as firms opt out of the fiscal responsibilities and hassles of operating and managing their own hardware, software, processes and skills.

In the utility utopia, it's all about the services, Kaplan said.

It's about time

Analysts with Gartner have proclaimed that utility computing will stop swimming with the fads in the trendy pool and make its move into the mainstream by 2005. International Data Corp. has hinted that the boosters on the fad rocket could fall off even sooner, putting utility computing on a steady course.

But Kaplan isn't so sure about that timeline.

"[Having someone else build and manage IT facilities] is a fundamental change that could take longer than five years, [and to] completely replace traditional data center models could take far longer," he said.

Dell might agree. The company announced in May that it was going to pass on a utility computing initiative. Company officials said the technology needed three or four more years to ripen and make good on its promise. Dell also might feel a little antsy about on-demand technology -- it threatens the company's "easy as Dell" business model of selling inexpensive, self-service PCs, laptops and servers.

So don't expect a Commissioner Gordon-to-Batman type red telephone to replace the IT department just yet. But things certainly may look different. If the data center isn't totally outsourced, at the very least, the silo divisions of the IT department may go away, according to David Kelly, principal at Upside Research in Newton, Mass. He told that the utility model will bring IT workers out of their separate server, storage and database habitats and force them to interact more -- the resources are going to be more closely linked, and so will they.

Planning for tomorrow

Just because IT vendors are chasing the utility computing bandwagon with the fervor of the girls chasing the Beatles in A Hard Day's Night doesn't mean you, the IT manager, need to be in such a rush. In fact, you need to sit back and take a hard look at your business first.

In an interview with, Bob Schultz, HP's head of network storage solutions, said that users need to be able to measure, assess and maintain their IT infrastructures, then link the infrastructure to business processes.

Diana Billingham, vice president of U.K. technology services for Cap Gemini Ernst & Young, brought up the business angle as well. She said that firms thinking about the utility model need to figure out where the technology can best be deployed to improve business processes. "What is important is what is the business case, the business proposition, and what are the key business processes that are going to be grid enabled," she told Computer Business Review Online. Business executives need to know what to expect when they sign up for utility computing, so it's also a good idea to have a service-level agreement (SLA) that spells out exactly what services will be provided.

"Stay informed. Evaluate what the realities are," recommended Kaplan. "Get references [and] start small with a pilot approach where there's low risk, rather than convert entirely to this model too quickly."

It's also key to know the nuances of your company. For instance, is it wise to let someone else provide and manage your storage, security or payroll functions? Maybe you want your own IT workers to be able to change user configurations. It's important to assess what needs to stay and what can go. And it's important to ask for a second opinion. "Customers need some evaluation and consulting help to determine what their real requirements are," Kaplan said. Paying for some solid advice now could save more money, not to mention potential headaches, down the road.

As long as the economy is lagging and technology is complicated, data centers will shift out, Kaplan said. But once things pick up and -- according to some analysts, the uptick has begun -- insourcing may become the thing to do.

So if you want to see where the data center is going, maybe it's a good idea to take a look at where it is now. The more things change, the more they may be the same.


Utility computing comes to the desktop

Putting the 'U' in utility computing -- is it for you?

Evaluating the concept of utility computing, part 1

Evaluating utility computing, part 2

Ask Jeff Kaplan a question about utility computing.

CIO Trendwatch: Utility computing good, spam bad

Webcast: Utility computing, a reality check

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