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Yankee Group: Utility utopia will take time, money

One of the IT buzzwords of 2003 -- almost the IT equivalent of Ben and J. Lo (at the very least Demi and Ashton), the concept of utility computing has gotten another round of kudos as a cost-saver, but even cost savings, like most things, come with a price tag.

Yankee Group analysts have put in their two cents about utility computing.

One of the busiest IT buzzwords of 2003, utility computing (sometimes called "on-demand") is a concept wherein computing power and services are tapped like water and electricity. Companies that board this bandwagon only pay for what they use.

Yankee Group analysts think that the concept makes good sense, although it's going to take a lot of dollars over the next decade before IT departments become true utility shops.

But that doesn't mean CIOs can't take advantage of it -- at least in small doses.

Boston-based Yankee Group's "Utility Computing in Next-Gen IT Architectures" report took a hard look at utility computing's market drivers and key technologies and services. Analysts wrote that, while utility computing makes it easier for a business to try new things, getting an entire environment in tune with the concept won't come cheap.

In order to reach the utilitarian utopia, companies will have to spend hefty chunks of change to restructure the application, management and virtualization layers. Because of this needed change, the utility model is changing the very foundations on which computing is priced, analysts said in a statement.

"CIOs need to understand this change in cost structure to drive business benefits out of a changing set of sourcing options," said Andy Efstathiou, who co-authored the study. Utility computing can help CIOs tackle many of the challenges they face and help them save money on single computing transactions, but it's going to take huge investments on the part of vendors to get technology utility-enabled, he said.

Jamie Gruener, another co-author, said that while hardware vendors and some independent software vendors are going ahead with those huge investments, most other companies are taking a wait-and-see approach, preferring for the products to develop and mature before they make a move. Sun Microsystems Inc. and Affiliated Computer Services Inc. are two firms moving ahead with those investments. Dell Inc. is an example of a firm that's waiting for the market to ripen. Gartner Inc. analysts have said that utility computing should be a mainstream model by 2005.

Just because some firms may take their IT buzzwords with a grain of salt and prefer to slide, rather than dive, into the utility pool, there's no reason to sidestep the utility model. Even baby steps could reap rewards.

"Partial implementation can yield handsome benefits and prepare an enterprise for future informed adoption of this model," Gruener said in a statement.


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