Necessity Drives Corporate Utility Computing Pioneers

By John Pallatto  |  Posted 2004-11-05 Print this article Print

Pioneering IT executives say they are implementing utility computing when it enables them to solve pressing business needs and where it makes economic sense.

SAN JOSE, Calif.—Necessity, practicality and hard-nosed business principles are defining utility computing for the pioneering organizations that are actually delivering computing capacity on demand to operating units. A handful of these organizations gathered here at International Data Corp.s IDC Enterprise Forum on Thursday to discuss the capabilities and implementation options for on-demand computing. The common theme among the organizations that told their stories at the forum was not that they started with the clear intention of implementing a utility computing program, but that it turned out that they solved the business problems they had using the principles of utility computing—with shared, virtualized resources that clients paid for according to what they used.
The organizations that presented included Automated Data Processing Inc., American International Group Inc., eBay Inc. and the chief information officer at the Florida state attorneys office.
For global Internet auction portal eBay, an on-demand IT model was essential for the company to keep up with the explosive growth in the number of registered users and the number of auctions that its system manages every day, said Mark Hydar, enterprise systems manager at eBay, based in San Jose, Calif. Click here to read more about why standard management communication processes are needed to successfully implement utility computing. "We got up where we did about $1 billion, and we asked what are we going to do to get to $10 billion," Hydar said. The utility computing model was a natural approach for eBay because it "gives us the flexibility, the scalability that we wanted to be able to do that without increasing our headcount" in a way that would be anywhere near proportional to the companys business growth, he said. He noted that eBays business quadrupled in the three years after its growth started taking off in 2000, and that was before eBay started its aggressive expansion in international markets. Utility computing allows eBay to readily add computing resources, and to shift application resources around as different business sectors grow in various parts of the world, he said. On-demand computing fits "our business needs, which are always availability, speed and economics—which means better, faster, cheaper." Utility computing enabled the state attorneys office for the 15th Judicial Circuit in West Palm Beach, Fla., to provide for a wide range of law enforcement and county government offices. "Our office, which was just a prosecutors office, became a service bureau for 37 law enforcement offices in southern Florida," said Dan Zinn, CIO for the state attorneys office. His office also provides computer resources for 67 social service offices, courts and county business departments, he said. He was able to do this by using standard hardware, operating systems, databases and Internet access to give these diverse offices access to computing power, he said. The on-demand model allows Zinns office to "replace five disparate systems with one system." Next Page: Winning management support.

John Pallatto John Pallatto is's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.

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