Because companies such as IBM and EDS are the primary vendors pushing this model, it would be easy to simply dismiss utility computing as the latest fad in outsourcing.
Although IBM, EDS and others in this space would like you to think that utility computing will lead to all IT tasks being outsourced, nothing could be further from the truth.
What will happen, however, is an across-the-board recognition that utility computing represents how IT organisations need to think about the services they offer.
Several technology trends are coming together to facilitate utility computing. At the network infrastructure level, our ability to see, route and prioritise packets based on their content is increasingly sophisticated. On the software side, web services technologies are rapidly evolving to provide a framework for integration. Meanwhile, the tools we use to configure and provision servers and applications are getting to the point where we can respond immediately to any surge in demand for additional computer resources. And finally, we're seeing promising experiments in grid computing technologies that interconnect a variety of networks into a seamless tapestry of global computing resources.
As IT organisations begin to embrace these advances, they will need to change the way they operate. Instead of offering IT resources at a fixed cost, they will function like a utility that provides computing services to their company. And just as with the local electric utility, IT organisations will be connected to a grid of computing resources that they can call on to supplement their existing services as needed.
This means IT departments will be able to scale their IT investments to meet the average level of demand by their organisation, and then they can opt to augment that service with help from outside providers during temporary spikes in demand. Utility computing will be the catalyst for a wave of right-sizing of computing resources across the enterprise landscape.
This will take some time to play out. The technologies that enable on-demand utility computing are still in their infancy, but the pace of innovation in these areas is startling. The advantage your IT organisation could gain in terms of managing costs is immense, and even more important will be your company's ability to serve as a computing utility to the network of businesses that make up the ecosystem that is your industry sector.
Most large-scale organisations are on the verge of becoming enterprise service providers by leveraging a utility computing model. And most small and mid-sized organisations will have to figure out how they are going to integrate their IT operations with the larger companies in their sector.
None of this should come as shock. It's the natural next wave of evolution for the entire industry. And the organisations that start thinking about this today will naturally be the ones fit enough to survive tomorrow.