What the heck is utility computing anyway???

[#1]

I was talking with some folks the other day about the market for utility computing. They were discussing their ability to sell by CPU minute ... That's fine if you’re selling to an IT shop for a compute bound application, but if you know anything about applications and performance, it seems there are other constraints that need to be measured as well (e.g., memory, I/O).

I then began to think about it a whole other way. Unless you’re an IT organization, do you really care about CPU minutes ... or should the utility be an aggregation of services? Much closer to SaaS or even Business Process Outsourcing (the only difference is the business process is more of an IT service).

Do some of the same issues asked by David Terrar in his blog entry about the 5 questions to ask for SaaS, apply to Utility computing as well -- although slightly differently? Is the difference between SaaS and utility computing just who owns the software running in the environment?

Do people who want to have SharePoint portal capabilities (for example), want to know about CPU minutes? I doubt it. What matters to them is the number of simultaneous users and the disk space required, and a few things I can't comprehend. If I were to develop a utility computing solution around SharePoint, would that constitute SaaS?

What about an ERP system like SAP? Can the utility have the same structure for BW as it does for the finance modules? I doubt it. This one would have to be a compute utility though, since the user is required by SAP to own the license in almost every case.

What about the difference between production and development for the computing environment? Production needs higher availability and business continuity. Can those aspects be turned into a service uplift that the market can understand and value or is it just an expectation by the market?

It is clear to me that the whole concept of providing capabilities in the form of bundled computer resources and services will come in many flavors. Although I see some people talk about it in those terms, the complexities of the market are not well understood by most.

Anyone who is interested in this kind of thought process needs to read this entertaining post (for Monty Python Fans).

[#2]

Charlie, it is a little disappointing that thought leadership in this area is not coming from EDS or IBM, which has been promising 'on-demand' for a while. SaaS defintiions are going to pressure (and open up opportunities) for outsourcers to offer what I call SaCS - see below. The sooner you accept most of outsourced infrastructure and apps is a utility and you have long had 100 to 500X the scale of your clients and should be passing along economies of that scale, the better you will adapt and may be even lead in this market

dealarchitect.typepad.com/.../sacs_software_a.html

[#3]

Vinnie, the entry in your blog skips over the part about the software licensing restrictions that keep the pricing at the levels you mention -- if it can be priced at all (e.g., SAP). I agree though with the need for thought leadership. One of the software vendors is going to break out of the pack and that will be very distruptive.

People talk about the desire for a 'utility' but then they want it customized. I think by definition, that means that it is not a commodity. Time would be better spent understanding the needs of the market and what kind of custom requiremetns are desirable than trying to conform to the folks that are trying to commoditize the approach into irrelevance.