Selling Computing Resources With On-Demand Utility Computing

You have heard a lot about this concept in 2005, but for the most part it remains only in the conceptual stage.

In its simplest terms, on-demand computing is a method of selling computing resources as if they were utilities like electricity or the telephone service. For example, to go online, you would turn on the ISP service and would be charged for the time you spend online, the bandwidth you consume and the drive space you occupy - all in one monthly bill. The workstations, PDAs or other devices you use would be rented and the charge added to your bill.

The big developers for on-demand include many familiar names: HP, Sun, IBM, Veritas and Microsoft.

The hardware devices at the core of on-demand are storage servers, another sub-industry that is destined to grow in 2004. Although storage servers don't appear glamorous to most people, stock is going up for companies that are currently building them: TDK, Veritas, Network Appliance, EMC and Adaptec.

Storage server technology is referred to as NAS (Network Assisted Storage) and/or SAN (Storage Area Networking). The idea is to use multiple off-site servers to store company data via the TCP/IP protocol. A company employee can then access the data whether he or she is in the office or on the road. The companies can rent server time and space on an as-needed or on- demand basis, similar to time-sharing on mainframes.

EMC, for example, is a leading supplier of enterprise data storage systems and software.

Microsoft has made an arrangement this year with them to develop databases and portal server interfaces. The interfaces would resemble Web sites.

Says Bioll Gates: 

"In 2000, we committed ourselves to the .Net strategy. That assumed XML and Web services would become mainstream. Looking back, one of the things that was a clear success was the bet on XML (Extensible Markup Language) and Web services. People are just beginning to understand how profound they are as industry standards."

But it's not the market,says Gates, that's driving MS's research:

"It's the development and operational and personnel costs that are really jumping up to be this huge percentage. You have to go after those to free up the most dollars for (IT) to innovate. We're not pro- or anti-outsourcing, but we think people have to be careful because there's certainly been more failures than successes."

(The "outsourcing" refers to the fact that a customer's data would be stored off-site, a condition that many companies are not ready to accept.)

On the other hand, some of the biggies aren't ready to rush into on-demand. Michael Dell has this to say:

"If we felt utility computing would save customers lots of money, we'd immediately have utility computing. But we don't believe that's the case. There are a lot of schemes that companies come up with to lock the customer in to a proprietary mechanism. This is one of them. I'm hard-pressed to see customers say we save a whole bunch of money by doing it.

"This issue of services versus boxes has become a critical one in the industry. Where does Dell stand? We have a pretty extensive services business. We have embedded services that go along with the product. Then we have the discretionary services, the professional consulting, SAN (storage area network) design and deployment, application development, managed services."

A key part of IBM's vision is WebSphere, the company's Java 2 Enterprise Edition (J2EE)-compliant application server for building and using custom business applications.

"During the first half of this year, the company will revamp WebSphere to make it more suitable for running applications that conform to a services-oriented architecture, a style of application design that is a requirement for on-demand computing," said Scott Hebner, director of WebSphere at IBM.

"By using technologies such as XML (Extensible Markup Language) and Web services, businesses can exchange data between systems regardless of the underlying operating system or programming method. "

Sensor Networks

Pushing the on-demand concept to its extreme is visionary IT journalist Dana Blankenhorn:

"Stop thinking about computers as being TV sets, tape recorders and typewriters bound together by wires - they're not... The network, not the chassis, is the base unit of computing in a wireless world.

"The whole Internet is like one big computer, doing literally billions of jobs at once...Most important, stop thinking of computing as existing on one machine, or on one chip, or as what happens between a TV, a typewriter and a tape recorder - these are just interfacces...Instead think about how we can expand the computing universe, with network-connected chips processing our entertainment choices, or or eating choices, or our garden's eating choices, or our biorhythms, or our security."

Perhaps in another decade, on-demand networking will be wireless. A person in New York will just have to speak the commands into a chip on his wrist to obtain data from a server in Australia.

--Roy Troxel

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