The recent flurry of new 'on-demand' service offerings unveiled by MCI, AT&T, and SAVVIS is a strong indication that the utility computing movement is gaining momentum. While they prefer to refer to their offerings as 'managed services,' the telecommunications carriers are being driven by the same trends that are fuelling the rapid evolution of the utility computing market.

Skeptics may scoff at the suggestion that the carriers can deliver a competitive set of utility computing services given the assortment of internal operational challenges they face. And AT&T and MCI will need to withstand the additional distractions associated with their respective mergers with SBC and Verizon. However, they, along with SAVVIS, are winning customers and gaining valuable experience responding to customers' utility computing service needs.

MCI recently unveiled a Utility Storage Service through which the carrier can quickly provision storage area networking (SAN) solutions to enterprises to respond to their fluctuating needs. This offers an attractive alternative to enterprises tired of investing in excess storage capacity to meet their occasional requirements and allows enterprises to consolidate their existing storage systems across multiple platforms, simplifying their complex storage management challenges.

MCI has also expanded its managed security capabilities as a result of its acquisition of independent managed service provider NetSec and intends to expand its managed application service capabilities with its acquisition of Totality, a managed application service provider.

AT&T has countered MCI's moves by expanding its network of hosting facilities worldwide and by adding two new features to its application hosting and performance management arsenal -- Server and Operating System Support (SOSS) and Managed Utility Computing Pay-Per-Use.

The service provider that has gone furthest down the utility computing path is SAVVIS. Founded as a specialized Internet Protocol (IP) provider, SAVVIS has combined bold acquisitions and technology adoption to build the most innovative and advanced on-demand service delivery infrastructure and managed service portfolio in the industry. On the acquisition side, SAVVIS purchased Cable & Wireless' hosting facilities to give it a global service delivery platform. On the technology side, the company is combining 3PAR virtualized storage technology, Egenera blade technology and Sun's SunRay^TM thin client systems to deliver end-to-end utility computing solutions that span centralized hosting and distributed desktop services.

While this latest round of carrier managed services range broadly from content management to storage solutions, what they have in common is they are all responding to rising enterprise interest and willingness to offload specific aspects of their IT/network operations to third parties so that enterprises can focus on their core competencies and more strategic technology initiatives.

IT and business decision-makers are increasingly leveraging carriers' managed network, desktop, messaging, security, storage and other services to eliminate the hassles of managing these functions internally, and to give them more cost-effective infrastructure resources to support their business needs.

Purists might argue that managed services from the telecom carriers don't qualify as true utility computing solutions. On the contrary, THINKstrategies' research shows that enterprise IT and business leaders increasingly view managed services as the first step toward migrating to an 'on-demand,' utility computing model.

By investing aggressively in a variety of acquisitions, new technologies and internal development projects, traditional carriers and next-generation service providers are not only providing a portfolio of managed infrastructure services, they are also offering specialized utility computing services for a variety of vertical markets, including digital content services for the media industry. They are meeting the needs of enterprises that are looking for more cost-effective and reliable infrastructure solutions that can support their corporate priorities without jeopardizing their competitiveness.

THINKstrategies

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