Year in review: Utility's identity crisis

Technology makers moved ahead with utility computing strategies in 2003, despite a lack of agreement on what utility computing really is or what it should cost.

In many ways, the definition of "utility computing" seems fuzzier than ever. Ideally, say analysts, the idea of utility computing is to offer software and business applications on an outsourced basis, whether those services are offered to paying customers or to users within a company's firewall. The software and applications can be allocated in varying amounts, depending on a customer's need at any given time.

But in reality, companies grouped everything from grid computing to autonomous systems management to plain old outsourcing deals under the utility computing umbrella, in 2003. The definition seems to be in the eye of the beholder--or of the technology seller, in this case.

This year, the major systems makers--IBM, Hewlett-Packard, Sun Microsystems and Computer Associates--launched new utility initiatives that were tied to their respective strategies. But software giant Microsoft and PC maker Dell remained on the sidelines, unconvinced that utility plans would help their bottom lines.

IBM, which in many ways started the utility stampede last year by pledging to spend $10 billion on utility initiatives, is the most ambitious player in the market. Over the course of 2003, Big Blue announced plans to rent out computing power, to retool its server software, and even to make a play for online gamers--all in the name of furthering its on-demand efforts. It also inked some big-ticket deals with on-demand customers.

Still, IBM acknowledges that it sometimes has trouble explaining utility computing to potential buyers.

HP announced its Adaptive Enterprise effort in the spring, and then spent much of the rest of the year attempting to define it. Not surprisingly, its plan hinges on its server business, but also extends to its PC and printer units. HP's message is clearly a work in progress, as several of the company's executives--including its CEO, Carly Fiorina--struggled at times to define it. Curiously, Fiorina had no trouble defining grid computing, which is a cornerstone of IBM's rival utility initiative, as overhyped.

Sun's N1 concept of united computing resources took shape in 2003, as the tech giant acquired several companies to bolster the plan's underlying technology. Sun also signed up 60 early customers for N1 and inked a deal with Siebel Systems under which it will help provide a hosted version of the software maker's business products.

Computer Associates jumped into the utility computing market in April, with plans to add new system provisioning tools to its Unicenter system management software. Later in the year, it introduced additional utility computing-related management products.

Some software makers also were busy on the utility front. Salesforce.com continued to sign up customers for its on-demand business applications, while rival Siebel acquired a company and inked partnership deals with Sun, IBM and BT to back its own hosted service.

--Mike Ricciuti?