Blue Skies Ahead for Utility Computing?

Last month, IBM unveiled its latest utility computing plans to an audience
in Shanghai, China, and captured the attention of the entire IT industry. The
company's "Blue
Cloud" portfolio promises to enable enterprises to tap into IBM's data
center capabilities via the Internet to satisfy their application and computing
needs.

Anyone with a memory of over five years will recall that IBM made similar promises
around 2002 that it has yet to fulfill. Will IBM be true to its word this time
around?

Back in 2002, IBM was pioneering concepts like autonomous and on-demand computing
and promoting Linux operating systems and Software-as-Service (IBM's version
of SaaS) in an effort to demonstrate to its customers that it understood the
changing nature of their business requirements.

Some of these ideas were in line with the initial hypothesis of Nicholas Carr's
writings that IT didn't matter because companies could increasingly leverage
commoditized computing power rather than build and maintain their own in-house
operations.

Yet, IBM drifted away from these ideas in favor of appealing to a future generation
of potential corporate workers with its Second Life initiative. Ironically,
just as IBM was abandoning its thought-leadership position in the utility computing
world to pursue avatars in Cyberspace, a widening assortment of new players
were ready to pick up the on-demand banner to make it a reality.

The consumer world became flooded with on-demand alternatives ranging from
Apple iTunes to YouTube videos, with Amazon and eBay in between. Google moved
beyond its popular search solution to create a new world of widgets and ready-to-use
apps that could satisfy the simple needs of casual users.

I've written on numerous occasions in this space about Salesforce.com's success
in giving corporate customers the on-demand applications they were seeking to
meet their corporate needs as well.

These offerings served as a proof point and stepping stone for many companies
who were ready to 'out-task' the burdens of hardware and software deployment
and support to a viable vendor so they could reap the benefits of their on-demand
system and application capabilities.

The tremendous success of Salesforce.com has spawned a rapidly growing array
of Software-as-a-Service (SaaS) vendors offering on-demand applications in nearly
every application category aimed at nearly every industry sector. The SaaS movement
is fundamentally changing the software industry, forcing Microsoft, Oracle,
SAP and every other major independent software vendor (ISV) to rearchitect their
applications, restructure their licensing policies and reorient their corporate
cultures to be truly services-oriented rather than product-centric.

While everyone was waiting for Google to assert its position in the corporate
on-demand world, Amazon emerged with little fanfare in 2006 with its Elastic
Compute Cloud (Amazon EC2). Its economical, pay-as-you-go computing platform
quickly attracted the attention of software developers and small tech shops
who found it perfect for their needs. As I stated
here in May, Amazon's EC2 success breathed new life into the utility computing
market.

Meanwhile, on-demand storage services have also experienced hyper-growth with
consumer-oriented services, like Carbonite and Mozy, gaining corporate acceptance
among business end-users, and motivating a growing array of players to offer
managed storage services for companies of all sizes.

Through all of this IBM remained on the sidelines playing the role of a traditional
hardware, software and services vendor. Sure, it offered Linux servers, robust
middleware and hosting services that could support the SaaS movement. But it
was no longer the thought-leader of this movement. Instead, it was simply a
technology and services supplier.

To its credit, IBM has been steadily building an arsenal of utility computing
building-blocks that can make its past promises a reality. Most recently, IBM
(along with HP) have been making acquisitions in IT automation software that
will not only make it easier for their corporate customers to manage their data
center environments, but will enable IBM to more easily provision its utility
computing services.

So, IBM's return to the utility computing arena with its Blue Cloud initiative
is an added endorsement of the on-demand movement. No longer burdened with the
role of industry evangelist, IBM can now capitalize on a new generation of technology
and a new level of customer receptivity to bring more utility computing services
to market.

Ironically, IBMs biggest hurdle at this stage may be reconciling its new utility
computing services internally among its existing products and outsourcing services
and convincing its channel partners that these services won't usurp their positions.