Utility model expected to take over

Get used to a future where computer services are delivered over the Internet like electricity flows through wires to your home, says a report from PriceWaterhouseCoopers.

“”The Internet is gradually developing into a conduit

for delivering computing power as a utility, much like energy is delivered,”” says the report entitled Technology Forecast 2002-2004.

Although there is little of what can be described as new in the survey, the authors say they wanted to depict “”multi-year trends and directions in IT rather than merely predicting developments in a single calendar year.””

Uppermost among these trends, as identified by one of the forecast authors, is the development of a worldwide computing grid layered on top of the Internet in which IT becomes a utility. Businesses would access and pay for computing power offered by a service provider instead of operating their own data centres.

That trend will also have a huge effect on how IT departments operate, confirms Terry Retter, a director in the strategic technology center of PriceWaterhouseCoopers in Menlo Park, Calif., and a contributing editor to the report.

Retter says IT people will be more involved in infrastructure support and service delivery, and will need to learn how to deal with all kinds of service-providers from the ISPs to ASPs.

Already companies are realizing they can obtain significant savings by outsourcing elements of their IT operations, he said. The emergence of the utility model, where IT is billed by metered usage or subscription-based services, is a logical next step.

Some of the earlier services in this model are already available, he said, especially in the area of enterprise application integration, where re-usable chunks of code are being used to tie together different systems.

There is, however, one serious roadblock to whether the utility model will be taking over any time soon.

“”No revenue model has been developed for how to pay for all this,”” says Retter. Other issues relate to security in sending all these services around, and complexity, such as dividing complex applications such as ERP into components.

In terms of other technologies, Retter said he expects security and wireless to be hot topics again in 2003, adding that probably isn’t any different than the past year.

He, however, warned of “”a disconnect.”” While security is number one on the CIOs list, it’s probably eight or nine in terms of the CEO’s priorities. “”CIOs are mostly concerned with operational issues such as “”how to keep the damn computers running,”” CEOs need to obviously focus business issues such as shareholder value and customer service, but it’s security issues that slip through the cracks.

In wireless, he advised users to closely watch “”the 802.11 phenomenon,”” which he says will become a “”hugely disruptive”” technology.

The spread of public-access wireless local-area networks (WiLANs) based on IEEE standard 802.11 was one of the biggest developments in 2002, the report says. Such networks have “”grown quickly in a viral sort of way,”” says Retter.

The problem is that WiLANs aren’t regulated while most wireless services are. Suppliers of wireless LANs therefore have huge cost advantages over wireless carriers who have purchased expensive third-generation (3G) licenses and now are obligated to build these networks.

Comment: info@itbusiness.ca

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