Utility Computing Will Only Deliver Real IT Cost Savings With Better Pricing Schemes That Match Variable Business Requirements Says Yankee Group

Business Wire, August 16, 2004

BOSTON -- Enterprises must become more savvy in analyzing, negotiating and purchasing utility IT services

Businesses have analyzed TCO using a paradigm based on a set of assumptions such as perpetual processes, single delivery method and stovepipe solutions. According to a recent Yankee Group report (Analyzing Utility Computing's Total Cost of Ownership), as IT transitions from a cost-center model to a profit- or service-center utility, the new paradigm must account for variations in duration, volumes and prices in business processes.

"Utility computing promises to reduce the IT costs associated with time and consumption commitments," says Andrew Efstathiou, Yankee Group Business & IT Services program manager. "These commitments will be tied directly to business need. To achieve that vision, the management layer of utility computing must be developed further and enterprises must become more sophisticated in their approach to analyzing, negotiating and purchasing utility IT services to drive business value creation."

Most current metering tools are vendor-specific and will not monitor all products. However, system infrastructure management software vendors are developing capabilities that will enable business-process-based TCO analysis. BMC Business Service Management Strategy, which utilizes the IT Masters MasterCell product; VERITAS' CommandCentral Service 3.5; Computer Associates' CA Common Services; HP's OpenView; IBM's Tivoli; and Mercury Interactive's Topaz and SiteScope are leaders in this area. We believe the winners will be vendors that develop both functionality and databases of operating performance to drive informed prospective analytics.

NOTE TO EDITORS

For interviews, contact Andrew Efstathiou, aefstathiou@yankeegroup.com.

THE YANKEE GROUP (http://www.yankeegroup.com)

The Yankee Group is the global leader in communications & networking research and consulting. The company helps businesses understand the opportunities, risks and competitive pressures of developing, deploying and consuming products and services that drive communication or information exchange. Now in its fourth decade, the Yankee Group is based in Boston with offices throughout North America and Europe.