Utility computing

Alex has a good point on mentioning utility computing that will probably become an impacting model in the current software-based industry configurations. In short the model is similar to the way we pay the electricity bill (at least in this part of the world) - you pay as much as you consume. I believe the industry is not there yet, Espen for example suggests that IBM's acquiring Ascential may be an indication of the industry going into that phase.

Alex's comment actually reminded me of a pdf paper on the topic I read from IBM's Technical Journals over the weekend. It's presenting 11 IT outsourcing cases and some related risks and hedging practices tied to the client-vendor relationship and the proprietory IT architecture. The paper concludes that utility computing will force companies considering outsourcing to switch from cost orientation goals to strategic agility.

And what does that mean? Large organizations don't need to run huge networks and systems any longer as they are translated into large piles of money blocked into fixed assets with low returns since those pieces of equipment are not used at their fully capacity, on the contrary - it's actually very difficult to have an optimized usage of them. As such, the solution will be the computing services and business processes used from third parties and made available on when-needed, as-needed bases. Or the pay-as-you-go model.

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