Untying the Gordian Knot: utility computing is a great concept but is still largely in the planning stages. Current software licensing models are proving to be a prime barrier to adoption

Telecom Asia, Nov, 2004 by Stefan Hammond

Chu estimated that it would take UC five to ten years to reach the level of acceptance that broadband currently enjoys in developed markets, such as Hong Kong. As for a possible UC charge-metric, he suggested a tiered per-transaction model that would encompass small, medium and complex transactions.

Looking for practical examples of UC is definitely a challenge, raising questions about how mature the technology is.

Most of the major hardware vendors--including IBM, Sun Microsystems and HP-already offer some form of physical infrastructure for UC. But to work, it requires a coordinated effort between hardware, applications and management software in order to perform tasks such as tracking pools of computing resources. The hardware and management software have arrived, at least in early forms, but it's all still largely in the trial stage for many enterprises. The key to utility is per-use pricing, though few are in agreement about what unit will serve as the best metric. While everyone agrees on kilowatts regardless of differing voltages, will UC's ultimate pricing metric be per minute, per transaction or per megabyte?

The bottom line, of course, is money. UC promises lower licensing costs by consolidating multiple instances of applications into fewer licenses and--once pricing models are in place--allowing companies to pay only for the active hours, transactions, megabytes or bits (the exact will probably vary by application). It also promises reduced maintenance costs, with outsourced UC services handling some operations and internal IT groups freed from laborious tasks such as upgrading countless remote servers one by one. The ultimate goal will be to create a technology framework for a truly agile enterprise, allowing business processes to be rebuilt on the fly to meet new opportunities.

But that may not matter so much at companies that already run a tight IT group. "If you've got an organization that has a good centralized policy base, that has strong governance on change management and how they grow their IT infrastructure, if there's communication between business units and IT, then the utility model is probably not going to be as attractive to them," says Gartner principal analyst Eric Goodness.

Loosely regulated IT organizations, however, could probably benefit from utility's simplification and control. Unfortunately, however, those organizations are going to be the least prepared for a move to utility. "If you've got anarchy, you don't know what your unit costs are now," Goodness says. "It is going to take some up-front elbow grease to get where they want to be." Without such preparation, he notes, UC may actually cost more than current operations.

What's the holdup?

Such a level of flexibility and tracking requires management tools that are currently in their infancy, which explains why not every company is jumping on the utility bandwagon. But the real holdup for UC is that application providers have yet to move en masse toward UC-ready licensing models.