Utility Computing boosts business agility and cuts costs

Companies depend on IT systems to operate effectively. However, many now find that because their IT infrastructure is so complex, introducing changes to business processes turns into a nightmare of incompatibilities, system glitches and lost productivity.

Such problems have a direct impact on a company’s performance, severely limiting its market responsiveness and undermining its competitive position. With IT financing rounds often completely out of sync with business demands, companies are starting to look at the benefits of commoditizing their IT services – either in-house or by outsourcing ‘on-demand’ IT services. Utility Computing is enabling these approaches and making IT services fast to deploy, easy to access, and cheap to use.

Managing change

Utility companies deliver water, gas, and electricity as commodity services to every home and business that is connected to their ‘public’ infrastructures. These utility services are provided on-demand and on a pay-as-you-use basis. Today, the same can be true for processing power, bandwidth, data storage, and enterprise software services. 

IT is often one of the biggest investments that a company makes; however, much of the investment can simply be a waste of resources. As IT infrastructure becomes increasingly complex then, along with the application portfolio, it becomes more and more difficult to rationalize effectively. While increasing numbers of companies want to reduce their capital expenditure on IT, they also want to reduce their operational overheads and use IT services as more cost effective, utility-like resources instead.

Increasing agility, reducing overheads

One of the benefits of utility computing is that enterprise applications are no longer tied to particular servers and are thus freed from the hardware depreciation cycle. This means that IT costs are no longer fixed and can be provided on a pay-as-you-go basis. Most companies prefer variable IT service costs that are linked to business demand - so they pay more when business is booming and less when business is slow. 

For the client, this approach offers the increased agility they need to respond quickly to business opportunities and changes in market demand. It also means that their own IT environment becomes far less complex - a benefit that makes their operations more responsive, productive, and cost-efficient. A good example is Storage-on-Demand, an already mature technique that provides companies with the opportunity to start deploying the utility concept in a staged and controlled manner. This allows them to become familiar and comfortable with many of the required processes before moving on to a full utility computing deployment.

The utility roadmap

Utility computing may appear to be a utopian vision of computing today but it will become a reality for many companies in the relatively near future. It will requires the development of a carefully planned roadmap based on current organizational and IT infrastructures. 

With this type of arrangement, clients no longer require a costly 24/7 maintenance contract and their workload is not system dependent. It provides a fluid working model for clients and a great deal of flexibility in the relationship. Clients have access to exactly the processing power they require, whenever they need it and only pay for what they use. 

When combined with essential business harmonization and change management services to manage any user resistance, standardization, and integration challenges, utility computing is fundamental to transforming an organization into a fully adaptive enterprise.

The utility revolution

The real innovation in utility computing is in its management, provisioning, and charge back software. It also requires different software licensing policies as applications can run on different computers and serve different numbers of users. This is a completely revolutionary way of working for enterprises, software houses, and IT service providers such as Atos Origin as with utility computing, the IT service provider needs to invest in an appropriate IT infrastructure that uses the latest technologies. 

Industry transformation

As IT becomes increasingly commoditized, the ownership of hardware will effectively move down the supply chain while solution providers move up in terms of the services and value they offer to their customers. Hardware vendors no longer offer just hardware but include a range of services to provide added value and increase their eroded margins. In fact, hardware vendors are ideally positioned to own the hardware and simply rent capacity to IT services providers and their enterprise customers as an added-value service. Further up the chain, IT service providers are looking to add more value by offering business solutions with associated metrics rather than simply a portfolio of IT services.

As the IT industry transforms itself over the coming years, customers will no longer need to own the enterprise applications they use to run their business. They can simply outsource all of their IT service requirements from providers like Atos Origin.

As a vendor-independent supplier, Atos Origin has an advantage over many of its competitors by being able to recommend hardware and software that fits a particular customer’s needs most effectively. Atos Origin has excellent relations with all the main hardware vendors and works closely with them to build the IT systems that best address their customer requirements.