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HolidayBuyer's Guide
Tech Industry

The new IT confusion

Droplets chairman Philip Brittan warns that lingering customer confusion about the differences between "grid" and "utility" computing could stall their wider adoption.

Big platform vendors such as IBM, Sun Microsystems, Oracle and Hewlett-Packard are promoting the panacea of "grid" and "utility" computing.

But widespread adoption still depends on the computer industry getting its definitions straight and clearing up the lingering customer confusion about these two related--but separate--concepts.

Grid computing refers to a way of harnessing the combined power of many computers into a single pool. That, in turn, supplies computing resources to a number of different applications to different users at the same time and makes a company's information technology infrastructure more resilient in the face of individual server failures or overload.


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The defining characteristic of utility computing is the way in which computing resources get provided as a so-called black box to consumers. Home owners simply tap into a line from the power company and draw as much electricity as they need from unseen sources. Utility computing is also intended to let customers focus more on their business without needing to worry about running out of computing horsepower.

Both approaches are supposed to help reduce overall costs. But the distinction between utility computing and grid computing is vitally important because the concepts are likely to appeal to different types of customers.

The major vendors are all pushing both approaches, each according to the biases of their existing businesses. IBM and HP are focused on infrastructure tools, hardware and managed services. Oracle is providing grid-capable software and hosted business applications. Sun is focused on "virtualizing" hardware resources.

But critics are skeptical of companies' willingness to adopt the outsourced utility model, and admittedly, the perceived risks of putting responsibility for mission-critical applications into the hands of other companies are high. Companies want to know that they will always have access to their data and applications, and that no other company will have access to their data. But let's look at what is already happening.

Critics are skeptical of companies' willingness to adopt the outsourced utility model.
One of a company's most valued assets is its customer database. Ironically, one of the most successful application service providers (ASPs) to date is CRM (customer relationship management) service Salesforce.com, whose popularity is causing Siebel Systems to offer a hosted version of its CRM software.

Oracle also offers hosted CRM and ERP (enterprise resource planning) systems. Another incredibly sensitive aspect of the functioning of a company is payroll. Yet firms have been outsourcing this function to the likes of Automatic Data Processing and Paychex for many years.

Some industry analysts have said companies will be unwilling to give up control of their IT infrastructures, yet many already do this with an even more critical infrastructure: telecommunications. Many companies depend entirely on telephone companies. They nonetheless trust that the communications they make through those third-party companies will be kept secret.

Another hurdle for utility computing: The user experience of application services needs to be as good as using in-house software. The first generation of ASPs offered user experiences in the form of Web pages and Citrix Systems sessions, which were greatly inferior to the desktop software to which users were accustomed.

With grid and utility computing, the major vendors are describing the natural next step in the evolution of IT.
But rich thin-client technologies are now available that give remotely hosted applications the responsiveness and sophistication of desktop software.

Vendors need to target grid and utility computing to the appropriate customer segments. Very large companies do like to control their infrastructures--even their power and telecommunications and sensitive functions such as payroll--so it is likely that they will lag in the adoption of utility computing. For some big companies, a stepping-stone to a utility model will be to keep their IT infrastructure in place while outsourcing the management to a third party such as IBM Global Services.

Utility computing offers very welcome relief from technology complexity and high, up-front investments for smaller and midsize companies (though it's unlikely they will have a sufficient number of users and servers to warrant an early investment in grid technology). But for large enterprises that want to keep their IT infrastructure in-house and gain the benefits of resiliency and resource-leveling, grid technology makes a lot of sense. We're starting to see this at financial institutions, in which every available computing resource is needed for end-of-day number crunching.

With grid and utility computing, the major vendors are describing the natural next step in the evolution of IT, and there seems to be little doubt that this model will eventually become the norm. But the immediate challenge is getting customers over the hurdles.