Vendors Rushing IT Utilities Online

By eweek  |  Posted 2001-08-06

While IBM has been among the earliest and most ambitious proponents of shared, pay-as-you-go IT utilities, competitors such as Sun Microsystems Inc., Accenture Ltd., Computer Sciences Corp., Compaq Computer Corp. and Hewlett-Packard Co. are not far behind.

Compaq and HP, of Palo Alto, Calif., for example, have in the last month announced what HP calls Pay per Use utility pricing and what Compaq calls Computing on Demand. Both permit enterprise customers, in effect, to build their own on-demand IT utilities. In HPs case, customers can install Unix-based HP Superdome servers and Intel Corp. IA-32-based servers and pay for as much or as little as they use. Similarly, Compaq said users of its AlphaServer and NonStop Himalaya high-performance servers can have additional capacity installed but pay only as its used. The Houston companys also offering a similar deal on storage products in North America and Europe and plans to add its ProLiant and all server products to the Computing on Demand mix by the end of September.

Going even faster toward the shared IT utility model is Sun. The company has been offering usage-based utility pricing for the past two years, first on its large 10000 servers and later on all server products, said Jamie Enns, manager of the companys Capacity on Demand Program Office, in Menlo Park, Calif. And soon, Enns said, Sun plans to announce a fully hosted IT utility offering. Unlike IBM, of Armonk, N.Y., however, Sun will not be investing to build its own utility data centers into which enterprise customers can plug. Instead, Sun is partnering with system integrators and Web hosting providers that, Enns said, will actually run the data centers based on Sun hardware and software. Recently, for example, Sun announced what it called a Continuum of Services partnership with Electronic Data Systems Corp., of Plano, Texas. Enns said Sun is working on similar deals with Exodus Communications Inc., of Santa Clara, Calif., and NaviSite Inc., of Andover, Mass.

Also beginning to target the on-demand IT utility concept are IT service providers such as Accenture and CSC, of El Segundo, Calif. CSC, for example, has begun selling shared IT utility services such as security, directory and Web site acceleration services, mainly to ISVs and other Web hosters. And the company has begun selling hosted applications to enterprise customers on a pay-as-you-go basis. CSC has partnered with Parametric Technology Corp., of Needham, Mass., to offer its Windchill Web-based collaborative design software as a hosted application.

Accenture has been partnering with hosting providers, including Exodus, WorldCom Inc. and Loudcloud Inc., to offer hosted IT utility services available to Accentures enterprise customers.

"We think youll see more usage-based pricing in the e-business services environment," said Dave Nass, Accentures outsourcing practices partner, in Chicago. "Its a natural maturation in the environment. Real cost advantages of sharing services can be passed on to clients."

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