Data Centers

Utility computing trend aims to make capacity planning easier and more efficient

Industry analysts predict that utility or on-demand computing will be the next big thing for IT vendors and services companies that sell to large enterprises. This new business model would provide more flexibility in planning and managing IT services.

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It’s noon on Friday and you just found out that your relatives are coming to spend the weekend. It’s time to contact the electric company to let them know that you will need extra electricity for the weekend. You’re told you have to fill out a purchase order and it will be five to seven days before you can get extra electricity.

Of course, basic utilities have extra capacity built into their delivery systems, but this would be a likely scenario if you were to find out at noon on Friday that you were expecting a major spike in usage on your servers. You’d have to call your provider, do a bunch of paperwork, and maybe in a few days you could get the extra capacity you need. That’s the kind of problem that utility computing aims to solve.

Utility computing vendors are looking toward a future in which computing capacity is as easy to acquire as electricity. Rather than having a fixed amount of computing resources, you would have access to computing resources on an as-needed basis—just like with electricity.

Summit Strategies describes utility computing this way:

“Utility computing consists of a virtualized pool of ‘self-managed’ IT resources that can be dynamically provisioned via policy-based tools that ensure these resources are easily and continually reallocated in a way that addresses the organization’s changing business and service needs. These resources can be located anywhere and managed by anyone, and the usage of these resources can be tracked and billed down to the level of an individual user or group.”

Read more of Summit Strategies' views of utility computing.

A shift in the IT services business model
Utility computing (also called “on-demand computing”) has become one of the hot topics in the IT analyst community and, increasingly, in larger enterprises that are looking for ways to reduce the fixed costs and complexity of IT. Gartner Dataquest believes that the advent of “utility” as a business model will “fundamentally challenge the established role of channels for suppliers of all types.”

According to a recent report from Summit Strategies, utility computing is on track to be the “next big thing” for IT vendors and services companies that sell to large enterprises.

Summit Strategies identified three major reasons why utility computing tools will become the next big thing. These tools:
  • Promise to address pressing business needs, including making the business more agile and able to treat IT as an increasingly variable cost.
  • Can be supplied in small, incremental bites that deliver fast, demonstrable, significant return on investment, so companies don't have to wait for the full implementation to achieve payoffs.
  • Provide total flexibility in implementation, from in-house and self-managed to fully outsourced, with everything in between—including a hybrid deployment model in which in-house capacity can be supplemented by third-party resources to handle peak needs.

Early leaders in the market
IBM, Sun, and HP have all jumped into the utility computing fray in a big way. IBM has received much of the attention with a series of high-profile announcements that began last year when Sam Palmisano took over the helm from Lou Gerstner. IBM announced it is spending $10 billion on its on-demand computing initiatives. HP also announced its Utility Data Center architecture, and Sun has its own N1 data center virtualization plans. According to the451, “Sun, HP, and IBM are duking it out over how best to meet utility computing requirements and command a leadership position.”

Read more of the451's views of utility computing.

Gartner Dataquest believes that telecommunications vendors are well positioned to be major players in the utility computing market too, because “After all, they are already utilities.” Read more of Gartner's views of utility computing.

To read more about the IT analysts’ views of the utility computing market, visit the Analyst Views Web site and search on utility computing or on-demand computing.

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