« The view from inside the box | Main | Utility computing and the digital divide »
Other takes on utility computing
June 17, 2005
News.com has a new article by Martin LaMonica that surveys some reactions, mainly negative, to my recent article on utility computing, "The End of Corporate Computing." CIOs and tech execs point to various challenges that utility suppliers must (and I think will) address, including security and customization at the user end. Dan Farber also chimes in, saying that "those who fail to gear up culturally and technically for utility computing in the next few years will end up at a competitive disadvantage."
LaMonica asked me for my thoughts on his piece and I emailed him the following response:
"What we don't know is the ultimate shape of the IT utility model or the course of its development. That's what makes it so interesting - and so dangerous to current suppliers. What we do know is that the current model of private IT supply, where every company has to build and maintain its own IT power plant, is profoundly inefficient, requiring massively redundant investments in hardware, software and labor. Centralizing IT supply provides much more attractive economics, and as the necessary technologies for utility computing continue their rapid advance, the utility model will also advance. Smaller companies that lack economies of scale in their internal IT operations are currently the early adopters of the utility model, as they were for electric utilities. My guess is that larger companies will as a first step set up their own internal IT utilities, consolidating their fragmented IT assets, and will begin shifting to the external supply model only when outside utilities have proven themselves and gained superior scale economies. Again, this follows the electricity pattern.
"There are certainly tough challenges ahead for utility suppliers. Probably the biggest is establishing ironclad security for each individual client's data as hardware and software assets become shared. The security issue will require technological breakthroughs, and I have faith that the IT industry will achieve them, probably pretty quickly. The technical challenges are tough, but the industry has overcome bigger ones in the past.
"In the end, the pressure on companies to embrace the most economical supply model for any important resource becomes too great to resist."
As I wrote in my article, the biggest barrier to the adoption of utility computing will be attitudinal rather than technical, and some of the people LaMonica quotes illustrate that point. I fear that they may, as Farber suggests, end up playing catch-up.
Advertisement: Are you ready for "The Big Switch"? Nicholas Carr's new book "is the best read so far about the significance of the shift to cloud computing," says the Financial Times. Fast Company calls it "compulsively readable." Order now from Amazon.com.
Comments
Technology trends support your argument. The future move toward Service Oriented Architecture (SOA) and the early adoption of shared data would lead one to see the future of IT utility. Unfortunately, the power plant will not be located near the river or a few miles down the road. This time, Asia will be the supplier of power unless we do something soon to re-invent our education system.
Posted by: R. Todd Stephens, Ph.D. at June 20, 2005 09:37 PM
to Todd: the "unfortunately" in your text is a bit the bone of contention! But your right in your point with the education system improvement - it's the most important factor.
Finally it's the old outsourcing / offshoring debate - everybody is crying for democracy and free-market economy but nobody is believing in the economic laws.
(see "international technology transfer: who gains and who loses?" by Roy Ruffin and Ronald Jones -> a very good explanation)
Posted by: fortuna at June 21, 2005 02:39 AM
There is another response to the utility computing view, see -
The End of Corporate IT? Not Quite.
Recent data shows that it's not how much you spend on IT; it's how you spend it.
http://www.computerworld.com/managementtopics/management/itspending/story/0,10801,102616,00.html?source=NLT_ROI&nid=102616
Posted by: Simon Griffiths at June 22, 2005 08:50 AM
You are correct with your thoughts and comments. The unfortunate part is that I live in a country that is driven by the masses of middle class. The global economy will create a global middle class which will bring an enormous quantity of people up to a level they have never seen before. However, our standard of living will be forced down which is not a force or erosion but rather one of equalization
Posted by: RTodd at June 22, 2005 09:03 AM
The Atlantic article:
Is Google Making Us Stupid?"
Nick's new book:
"Future Shock for the web-apps era" -Fast Company
"Ominously prescient" -Kirkus Reviews
"Riveting stuff" -New York Post
Greatest hits
Avatars consume as much electricity as Brazilians
The love song of J. Alfred Prufrock's avatar
Flight of the wingless coffin fly
Other writing
The end of corporate computing
Nick's last book:
Order from Amazon
Visit book site