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Utility Computing: Have You Got Religion?

At its most hyped, utility computing is a simple idea: enterprise IT services as reliable as electricity. Just plug in, use what you need, then pay the bill at the end of the month. It's an especially welcome notion to corporations that have spent mercilessly on IT only to find themselves wondering what, exactly, they got for their money. After years of a flat economy, fragile security and questions about whether IT ever really delivers the benefits it promises, many executives are ready for an IT epiphany. But is utility computing the way? That's hard to say when the industry cannot even agree on the term's definition. Although some major outsourcing deals have been positioned as utility computing in action--IBM's takeover of much of American Express' IT department is one example--this is the least likely form utility computing will take for most enterprises. Rather, most businesses will find strategic value in retaining ownership of their IT resources. For them, utility computing means rethinking how IT gets its job done--if IT needs to become more responsive and cost-effective, it will do so by holistically managing its systems and designing them from the ground up to be easier to run and fundamentally more flexible.

Definitions aside, the vendor and analyst communities are on board. Hewlett-Packard sees utility computing as a $3 billion market by 2004, growing to $18 billion by 2006, with professional services accounting for 30 percent to 35 percent of that total. IBM has earmarked $10 billion in research and development, acquisition, and marketing funds for its utility-computing initiative. On the analyst side, IDC says that 35 percent of all servers sold in the United States this year will be blades, with the market swelling to $6 billion by 2007.

Those rosy numbers would seem to portend a revolution, so we set out to determine just where the market is headed, hoping to separate reality from hype. What we found is that utility computing holds great promise and in fact represents the maturing of IT. Just as sales, manufacturing, R&D and other corporate disciplines have grown up, now it's IT's turn. It's not a matter of whether IT will change, but when.

Evolution vs. The Big Bang

Before we drill down into definitions, viewpoints and timetables, it's worth noting that we are skeptical as to whether a revolution is coming, and judging from our reader poll, so are you. Vendors have heralded more than one overnight transformation that never came to fruition. Why? Because Darwin had the right idea.

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