IT Strategy Clinic

Regardless of whether your business is focused on the IT Sector, you need to be aware of the strategic implications of technology on your business. This occasional column will endeavour to demystify some of the more prominent yet esoteric terms.

Today we look at UTILITY COMPUTING.

What is it?

Think utility. Water, gas and telephone are all utilities. What characteristics do they share? Well they are plumbed to your door and the amount you pay for them is proportional to your usage. And so it is with utility computing. Think of it as ‘IT on tap’. IBM is driving the marketing behind this model of computing.

Let someone else fret about technology management. In theory utility computing allows the customer to focus on the outcome, eg. processed payroll, rather than the payroll processing.

Sounds a bit like the data bureaux of days gone by?

It can be thought of that and in this respect utility computing starts to look very much like BPO (Business Process Outsourcing), another emerging trend. However it can be more fundamental than that. Your utility supplier may simply provide you with storage and processing capability as and when you need it. For example, a pharmaceutical company might want to test the efficacy of nanobot technology  (molecular sized programmable robots) by injecting thousands of these nanobots into the bloodstream of a cancer sufferer and then to monitor their interrelationship with the target carcinogenic cells. It is too early to trial this on real-people, so computer simulation is necessary. Such simulations require ‘supercomputers’ and it is not cost effective for the pharmaceutical company to own such equipment given the infrequency of such simulations. Thus it is more cost effective for them to hire the processing power as and when they need it.

Why do I need to know about it?

Utility computing might well be of interest to:

q       Small to medium sized businesses that may not be enjoying the economies of scale

q       Any organisation that has an infrequent need for large surges of computing power.

If this model catches on then end-user organisations will cease to be a target for IT vendors. Has anyone tried to sell you an electricity pylon lately?

Caution!

This concept has only just hit the streets.  It is very attractive to ‘tin shifters’ like IBM. This model shifts the model from buying IT assets to renting IT power. The hardware vendors, through pushing utility computing are migrating their customers away from a ‘big ticket’ purchasing model (unattractive in this cash flow conscious economy) to a continuous ‘smaller ticket’ revenue stream (attractive in this cashflow conscious economy).

Beware of being locked into a single vendor, even though it is their problem to deliver at the end of the day. And keep a close eye on the mounting costs, small continuous charges can soon mount up. Ask any mobile phone user.

How can I impress friends and colleagues?

Step 1 - Contrive for the impressee to receive a phone call during your meeting, which happens to have an IT theme.

Step 2 – Magnanimously encourage them to take the call, regardless of their protestations. Smile confidently throughout the call.

Step 3 – Once the call has finished, cut through the “post-interrupting phone call apologies” with “I have a vision for IT” Pause for effect. “Why can’t IT be more like the phone? Telephony is critical to our business, but we are not in the business of maintaining telecoms equipment. One day companies like ours will treat IT as a utility.” For maximum effect tilt head to the right and look up to the left.

Step 4 – Ask the impressee what their thoughts on this are?

NB. IT managers should think twice before employing this tactic on Board level management.