IT as a Utility? Wait a Minute!

Computing as a utility? Hey, it could happen unless we rethink a current trend.

The year is 2010. IBM signs a $7 billion outsourcing contract with Holdout Gear and Sprocket, taking on the companys 5,000-person IT staff. With that deal, IBM gains control of 90 percent of IT operations at Fortune 500 companies. As a result, the work force of IBM Global Services surpasses 1 million, making the IBM unit the largest employer in the world.

Dont laugh. If the present trend continues, it will happen. When IBM took over J.P. Morgan Chases IT operations last month, it was just the latest in a growing string of huge outsourcing deals, of which IBM had a 50 percent market share last year, far ahead of rivals EDS and CSC, according to Gartner. IBM is working to become every businesss IT-on-demand resource. So far, IT execs are glad to give their work forces to IBM or to plug in to IBMs Linux-on-demand services and pay only for what they use.

But lets fast-forward to 2011. With a working monopoly of IT resources having been achieved, IBM begins to take its role as a provider of computing as a utility a little too seriously.

Take monthly bills. No longer do they include a warm personal greeting from Chairman Emeritus Sam Palmisano, humbly thanking the customer for selecting IBM as its technology provider. In its place is the message: "We are not liable for interruptions of IT resources that are due to acts of God. If you have questions about your bill, please call 1-800-HOLD." But it wont be all bad. Older IT execs will be comforted to know that since they are senior citizens, IBM cant cut off their IT resources even if they are late in their monthly payments.

It all started because Lou Gerstner was once an IBM customer and didnt want to mess with the technology; he just wanted to call someone. IT resources on demand? Computing as a utility? Hey, it sounded good, but maybe wed better rethink this thing before it gets out of hand—while theres still time.