Opinion: Just a way to pay

Maybe you've heard about the visions of utility computing. You know, ultimately everything you need in IT is right there in a wall socket, just like the power you buy by the kilowatt-hour from that reseller known as your power utility. I first heard this idea years ago. The wounded US hype machine is again spinning out of control, trying to build some excitement around the concept. If you ask me, the IT department as we know it would be totally stuffed or non-existent in such a future.

The vision, if realised, is years away. For now it seems that familiar things like outsourcing arrangements and capacity-on-demand facilities in servers which allow extra processors to be switched on to cope with peaks are being repackaged and described as utility computing. The central theme being pay as you use it. Deals in the news include IBM's arrangement with American Express which is expected to be worth more than $US4 billion over the next seven years.

Amex will outsource much of its IT operations and transfer about one-third of its 6000 technology workers to IBM. According to reports, Amex retains control of its IT strategy, vendor relationships, its voice and data network and development of applications and databases. But the company will give IBM control of its IT operations infrastructure, including major data centres. Amex CIO Glen Salow was reported as saying that the company, which processes about one billion transactions daily, will receive IT support services from IBM on an as-needed "utility model" basis. This sounds like a pricing model rather than a vision of utility computing to me. It would be interesting to contrast the value that this type of service pricing brings to Amex with that offered on more traditional terms to current major outsourcing customers. Not to mention comparing utility pricing with the bazillion leasing arrangements already available.

Back to the utility vision. According to Test Centre analyst David Margulius (page 24), the technology needed for the "provisioning, scheduling, security, and policy-based management protocols needed to farm out compute jobs is barely on the drawing board". In the form of Web services and open standards' it's years away from letting enterprises buy "utility cycles for mission-critical apps". Also, Margulius adds, some applications can't be easily chopped up and delivered 'to dynamic resources' for processing.

Forget the vision and consider some of the pay-as-you-go offerings available now. These include Compaq's Capacity on Demand offering in storage and messaging and other capacity-based pricing arrangements from Sun and HP as well as IBM. I'm waiting for "buy now, nothing to pay until 2010".

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