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We recently got a peek at what may be the future of IT outsourcing when American Express became the first large company to sign up for IBM Global Services e-business-on-demand offering. While impressive, the size of the deal—an estimated $4 billion over seven years—was only part of the story. More significant was how Amex will pay: only for the server cycles, storage and other IT resources it uses, and the company will buy those resources from an IBM IT utility that eventually will be shared with other enterprise outsourcing customers.
The approach could deliver compelling advantages to large- enterprise IT customers. In the volatile business environments of many industries, enterprises need flexibility as well as reliability from their IT resources. The traditional approach to outsourcing—characterized by long, fixed-price contracts and customer-specific data centers—is often too inflexible to respond to sudden changes in business and IT requirements. A shared utility that enterprises could use and pay for as needed, however, would deliver clear advantages.
However, IGS officials acknowledged that at first, they wont be delivering server, storage and other resources from a shared IT utility. Clearly, pieces of the technology puzzle required to aggregate massive amounts of data center resources into a utility are missing. IBM officials have said they are hard at work on such tools, though. One project, code-named Oceano, would track customers use of shared-server farms and monitor service levels. Another, Blue Gene, would cluster thousands of servers into a self-healing, autonomic system. IBMs upcoming zSeries 800 model 0LF mainframe is designed for hosting groups of Linux virtual machines, and a joint development agreement with VMware is designed to deliver resource partitioning on IBMs Intel servers.
Enterprises are beginning to seek out shared-utility computing. Its time not only for IGS but also for competitors such as EDS, Sun Microsystems, Accenture, Computer Sciences and Hewlett-Packard to turn the vision into reality.