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Anyone old enough to remember the 70s or early 80s—a dwindling segment of the IT industry—can remember the famous Miller Lite commercials with an endless argument aimed at convincing traditional beer drinkers they didnt have to sacrifice taste to avoid a few calories. Similarly, a rapidly expanding array of IT vendors and service providers has been trying to convince enterprises large and small of the business benefits—”tastes great”—and cost advantages—”less filling”—of utility computing. As a result, there are plenty of IT decision makers who are trying to understand how utility computing works and what it could mean for their organizations.
To appeal to these IT pros, many vendors and service providers are rethinking their utility computing strategies and more aggressively pricing their offerings.
For example, Hewlett-Packard Co. officials recently said it had failed to sell large-scale enterprises on the far-reaching business benefits of its Adaptive Computing and UDC (Utility Data Center) concepts and is revamping them to be more modular and less expensive.
The UDC architecture had attractive features, such as server virtualization and automated provisioning, but it was too expensive and disruptive for most enterprises to implement. Now HP is trading in its “tastes great” technology value proposition for a “less filling” packaging and pricing strategy.
Sun Microsystems has also significantly changed its utility computing approach. In September, Sun unveiled a managed, on-demand grid computing service for enterprises that want to leverage Suns N1 Grid technology but dont want to buy and deploy the technology.
Suns shifting of its N1 strategy from traditional system sales to a managed service model was newsworthy enough, but adding even more spice to the announcement was Suns aggressive pricing, starting at $1 per processor, per hour.
IBM, meanwhile, has tried to show the “tastes great” business benefit of utility computing with its television advertisements for its on-demand solutions. However, IBMs on-demand story appeals mainly to Fortune 500 corporations that can afford IBMs technology and extensive consulting or outsourcing from IBMs Global Services division. IBM is still searching for a cost-effective way to penetrate the SMB market.
The “tastes great … less filling” campaign halted when light beers dual benefits were not disputed. The utility computing market is still in its embryonic stage in which the “costs less” versus “improves business” debate is just starting. IT decision makers continue to be risk-averse and budget-constrained, and utility computing will succeed only when IT vendors and services providers show they can both substantially cut IT costs and produce broad business benefits.
Jeffrey M. Kaplan is managing director of ThinkStrategies, a Wellesley, Mass., strategic consulting company. He can be reached at [email protected]. Free Spectrum is a forum for the IT community and welcomes contributions. Send submissions to [email protected].