AT&T Plans Utility Computing Overhaul

Plans to tie big-name software applications and per-minute CPU charges

December 21, 2005

3 Min Read
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AT&T Corp. is making big changes to its utility computing strategy next year, offering users application-based CPU pricing on a per-minute basis, according to Joe Weinman, the firms vice president of strategy and emerging services.

Weinman, speaking at the inaugural Globalcomm 2006 Master Class Series of lectures, hosted by Light Reading and the TIA, explained that one big-name software vendor, BEA Systems Inc., has already agreed to offer its WebLogic technology as part of the service, which will be launched in the first half of 2006.

AT&T has offered CPU-based pricing as part of its utility computing services for more than a year; although this is the first time that the service provider has tied them to specific applications.

With pay-as-you-go pricing for both hardware and software, users can avoid the expense of software licenses. (See Software Licensing Gridlock.) "That's the enormous breakthrough," Weinman claimed. "It's not like taking a Model-T and putting windshield wipers on it, it's like inventing the jet plane."

Weinman also hinted that AT&T may strike deals with other application software companies, but he did not name names. "What we're looking at doing is to allow multiple different applications with this CPU-based pricing," he said.Gordon Haff, senior analyst at Illuminata Inc., said this differs from the approach taken by other utility computing players such as IBM Corp., Hewlett Packard Co., and Sun Microsystems Inc., which have focused mainly on CPU-based pricing. "The general direction of utility computing over time will be about delivering a software service, rather than just delivering raw computer power," he explained.

Rob Enderle, principal analyst of technology consulting firm the Enderle Group, agrees that users are looking to avoid the hassle of running their own servers and software. He takes care to warn that they want to see real cost benefits. "Users could certainly save money with this, but it depends on the complexity of the pricing model," he said.

Weinman told Byte and Switch that AT&T is still thrashing out the pricing structure for the new utility computing service, which will be targeted at enterprises and the government sector.

Other vendors, such as HP and Sun, have broken down their CPU-based services into hourly charges. Last year, for example, Sun unveiled $1 per CPU-hour grid computing services, targeted at the financial services and energy markets. (See Sun Unlocks Grid for $1 and Sun, Telus Team Up.)

HP, for its part, recently launched its Infrastructure Provisioning Service for utility computing with prices ranging from 55 cents to $1.50 per CPU hour.Does AT&T's decision to bill by the minute mark a change in the utility computing landscape? Not necessarily, according to Haff. "It really boils down to the pricing and what they are offering," he said. "If it's $1 a minute, that's not so good, but if it's a penny a minute -- that's fairly competitive."

Weinman explained that the utility computing service will harness the raw computer power of AT&T's 30 Internet data centers scattered around the world. Earlier this year, perhaps in preparation for its utility computing push, the telecom giant added a number of new sites. (See AT&T Opens New IDCs .)

AT&T is also considering an overhaul of its managed storage utility service -- Ultravailable Storage -- although Weinman was unwilling to reveal specifics. "The pricing models that we have now are sufficient, but I think we're going to grow them to finer granularity," he said. "Maybe more flexibility on down-sizing storage or shorter timeframes."

Additionally, Weinman mentioned that AT&T has been hard at work devising a new search engine algorithm, which he is touting as a possible alternative to the PageRank algorithm used by Google. The exec told Byte and Switch that the new algorithm checks for the amount of traffic around a specific site, as opposed to the PageRank approach, which examines the number of links to a site.

— James Rogers, Senior Editor, Byte and SwitchOrganizations mentioned in this article:

  • AT&T Inc. (NYSE: T)

  • BEA Systems Inc. (Nasdaq: BEAS)

  • Telecommunications Industry Association (TIA)

  • Enderle Group

  • Google (Nasdaq: GOOG)

  • Hewlett-Packard Co. (NYSE: HPQ)

  • Illuminata Inc.

  • IBM Corp. (NYSE: IBM)

  • Sun Microsystems Inc.

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