Where Are We with Utility Computing in the Enterprise?

By By William Fellows, Principal Analyst, The 451 Group

January 9, 2006

Although it’s still very early on, outsourcing, software as a service, “pay as you go” and subscription licensing models point to a broad, long-term change in the technology market and the way IT services are purchased. The desire to better align business practices with IT deployment and to automate processes suggests that enterprises will change the way they buy IT services in the long term. Utility models imply several things: an ability to move from cost centers to computational utilities run on a commercial basis; links to external service providers for peak loads; the ability to move non-core assets off the balance sheet once IT resources are logically consolidated; and paying only for resources actually consumed.

Accessing compute resources and data without having to own the computers isn’t a new idea. But accessing resources that are hosted or managed by third parties is only one part of the utility computing story. Many of the larger early enterprise adopters are developing in-house IT utilities — with utility -style access and charge-back mechanisms. Some are additionally considering the use of external resources for specific projects, but in-house utilities are fundamentally where most of the action is today.

Nevertheless, a vision for the future of computing services based on the utility model is taking shape. On one side are ASPs, MSPs and outsourcing and hosting companies. On another are telcos and service providers, seeking roles as trusted providers of enterprise IT services. Meanwhile, the major IT vendors have redrawn their strategies to suggest that the ability to provide IT resources and services on an as-needed basis is the industry’s future.

It’s entirely reasonable — given the loaded expectations being driven by IT- vendor marketing — that enterprise early adopters should therefore want to procure and pay for their IT in different ways and indeed look forward to the day when the use of computers matches the ease of other everyday appliances and utilities.

From the enterprise customer’s point of view, the business logic of metering usage is compelling: you only pay for what you use. This is brought sharply into view when considering that the use and procurement of computing services is increasingly driven by economies of scale and the effective utilization of resources. But moving from ownership to utility will still require some insight. Early adopters are going to want a way to determine the likely cost to them when the meter is turned on.

From a supplier perspective, development around utility concepts is being played out in two areas: public utilities (HP Flexible Computing Service, IBM On Demand Supercomputing Centers, Sun Grid Compute Utility) and technologies to support internally shared/datacenter utilities.

Role of Grids

Most IT vendors and enterprise early adopters that The 451 Group has spoken with see grids, and the attributes that give Grid computing its meaning — virtualization, resource reallocation, automation and self-management — as providing a technology underpinning for new kinds of IT procurement, delivery and usage models, the most evident of which are SOAs and utility models. As Grid computing becomes important, it may also become more transparent. By the time it is important, it will be called something else — utility computing, SOA or datacenter automation, for example.

As far as utility models are concerned, there are a number of ways in which grids are being applied. Grids enable a new model of internal service provisioning, where the IT provider bills early adopters — a company’s own departments, and perhaps suppliers or customers, as well. Enterprise early adopters may be able to earn back some charges by making resources available for use on the grid. Because this activity is all happening over the Internet, these resources could just as well be supplied all or in part by an external hosting vendor or in some hybrid arrangement.

Key Drivers

For a number of enterprise early adopters that we have spoken with anecdotally, bare-metal resources are not what they are looking for. They are seeking providers that can supply capacity plus the application for a single price, and without the enterprise having to take care of the licensing. Fluent contracts for difference trading have been mentioned several times by early adopters. It is an approach already being offered by Savvis with Oracle instances, for example. Early indications show the following issues are key to users:

  • Reducing staff costs and hassle — For many users, reducing staff is the attraction of the outsourcing model. Deluxe Labs says a specialist can do things better and more cheaply, and its main cost savings have come from not having to hire database administrators.
  • Flexibility — The goal is the establishment of globally shared utility grids, based on a reference architecture, in which any application should be able to utilize spare capacity, regardless of geography.
  • Scalability, particularly during peak periods — For game developer Turbine, the utility model is currently attractive in two areas — testing and first-week (peak) load. Across the gaming industry, the first week in the launch of a new game provides a surge in demand of typically 200 percent of the normal load.
  • Doing new things — Early adopters, often initially attracted by cost savings, quickly move to being driven by the ability to do new things. For global bank HSBC, it doesn’t believe that using a Grid/utility model will reduce its TCO or enable it to save money — but it will allow it to make more money. Utility capacity will enable companies like Offshore Hydrocarbon Mapping (OHM) — an oil and gas services company — to be more competitive by doing things that no one else is doing using resources it could not afford to have in-house — and doing them more quickly.

Major Obstacles and Challenges

There is a wide variety of potential obstacles and challenges, the relative importance of which vary by enterprise organization. The following is a summary of the key ones:

  • Security — Across the board, security is the key emotional (cultural, organizational) and technology (compliance) barrier to using utility computing for banks.
  • User resistance – -User resistance and reluctance comes in many forms, not least of which is the fear that utility computing will not provide as promised.
  • Metering and billing — The immaturity of management and billing technology is a key challenge for the buildout of utility models. There will need to be a framework for handling the contractual and reconciliation elements for the kind of utility services that can be easily created and dissolved before such services can be implemented in commercial situations.
  • Software licensing — The issue of software licensing has been well covered in previous 451 Grid Adoption Research Service (GARS) research. It is a key obstacle for some early adopters, varying by vertical market and ISV approach.
  • Performance — Turbine Inc. has evaluated offerings from specialist companies looking to provide utility-type services for gaming firms. It sees them as having three main weaknesses — typically high prices, an inability to meet its specific needs and a limited set of software supported. In terms of the latter, Turbine believes that some vendors only offer support for one graphics package, which would mean that its special effects would be severely downgraded.
  • Multiple vendors — A key challenge for HSBC has been to streamline the number of suppliers it inherited from its acquired properties. It had a range of siloed grids and multiple vendors, so 18 months ago it put a stop to any further vendor proliferation and adopted a dual-vendor strategy, using Platform Computing and DataSynapse. It hopes that this stops further diversification of grid product use, reduces the need to redevelop products and allows it to focus on application development instead of infrastructure, as well as to standardize across lines of business, preserve development expertise and remove dependence on a single supplier.
  • Skills shortage — The key challenges for HSBC are: lack of developer and support expertise; testing and proving; the departure from conventional operational strategy; perceived loss of control by developers (each team currently runs its own grid — grid hugging versus server hugging); application design and use of third-party packages; datacenter capacities and constraints; business reluctance for shared infrastructure; adoption of unfamiliar technologies; and compliance and regulatory issues.

Coming Up Next

In the next GARS Grid computing report (to be released in January), The 451 Group will look at the opportunity for Grid computing in the manufacturing and industrial sectors. Many Grid vendors reference the manufacturing industry as a key vertical market. Using case studies and vendor profiles, this report will provide an overview of Grid computing activities within this industry, examine the current use and future requirements of enterprise Grid customers in this space, and discuss the potential levels of adoption. Key early adopters range from the aerospace and automotive industries to design and testing firms.

For more information on this or any other reports in 451 GARS, please visit: www.the451group.com/intake/gridtoday-dec05.

About William Fellows

William Fellows is a principal analyst at New York-based The 451 Group — an independent technology industry analyst company focused on the business of enterprise IT innovation.

Subscribe to HPCwire's Weekly Update!

Be the most informed person in the room! Stay ahead of the tech trends with industy updates delivered to you every week!

What’s New in Computing vs. COVID-19: Fugaku, Congress, De Novo Design & More

July 2, 2020

Supercomputing, big data and artificial intelligence are crucial tools in the fight against the coronavirus pandemic. Around the world, researchers, corporations and governments are urgently devoting their computing reso Read more…

By Oliver Peckham

OpenPOWER Reboot – New Director, New Silicon Partners, Leveraging Linux Foundation Connections

July 2, 2020

Earlier this week the OpenPOWER Foundation announced the contribution of IBM’s A21 Power processor core design to the open source community. Roughly this time last year, IBM announced open sourcing its Power instructio Read more…

By John Russell

HPC Career Notes: July 2020 Edition

July 1, 2020

In this monthly feature, we'll keep you up-to-date on the latest career developments for individuals in the high-performance computing community. Whether it's a promotion, new company hire, or even an accolade, we've got Read more…

By Mariana Iriarte

Supercomputers Enable Radical, Promising New COVID-19 Drug Development Approach

July 1, 2020

Around the world, innumerable supercomputers are sifting through billions of molecules in a desperate search for a viable therapeutic to treat COVID-19. Those molecules are pulled from enormous databases of known compoun Read more…

By Oliver Peckham

HPC-Powered Simulations Reveal a Looming Climatic Threat to Vital Monsoon Seasons

June 30, 2020

As June draws to a close, eyes are turning to the latter half of the year – and with it, the monsoon and hurricane seasons that can prove vital or devastating for many of the world’s coastal communities. Now, climate Read more…

By Oliver Peckham

AWS Solution Channel

Maxar Builds HPC on AWS to Deliver Forecasts 58% Faster Than Weather Supercomputer

When weather threatens drilling rigs, refineries, and other energy facilities, oil and gas companies want to move fast to protect personnel and equipment. And for firms that trade commodity shares in oil, precious metals, crops, and livestock, the weather can significantly impact their buy-sell decisions. Read more…

Intel® HPC + AI Pavilion

Supercomputing the Pandemic: Scientific Community Tackles COVID-19 from Multiple Perspectives

Since their inception, supercomputers have taken on the biggest, most complex, and most data-intensive computing challenges—from confirming Einstein’s theories about gravitational waves to predicting the impacts of climate change. Read more…

Hyperion Forecast – Headwinds in 2020 Won’t Stifle Cloud HPC Adoption or Arm’s Rise

June 30, 2020

The semiannual taking of HPC’s pulse by Hyperion Research – late fall at SC and early summer at ISC – is a much-watched indicator of things come. This year is no different though the conversion of ISC to a digital Read more…

By John Russell

OpenPOWER Reboot – New Director, New Silicon Partners, Leveraging Linux Foundation Connections

July 2, 2020

Earlier this week the OpenPOWER Foundation announced the contribution of IBM’s A21 Power processor core design to the open source community. Roughly this time Read more…

By John Russell

Hyperion Forecast – Headwinds in 2020 Won’t Stifle Cloud HPC Adoption or Arm’s Rise

June 30, 2020

The semiannual taking of HPC’s pulse by Hyperion Research – late fall at SC and early summer at ISC – is a much-watched indicator of things come. This yea Read more…

By John Russell

Racism and HPC: a Special Podcast

June 29, 2020

Promoting greater diversity in HPC is a much-discussed goal and ostensibly a long-sought goal in HPC. Yet it seems clear HPC is far from achieving this goal. Re Read more…

Top500 Trends: Movement on Top, but Record Low Turnover

June 25, 2020

The 55th installment of the Top500 list saw strong activity in the leadership segment with four new systems in the top ten and a crowning achievement from the f Read more…

By Tiffany Trader

ISC 2020 Keynote: Hope for the Future, Praise for Fugaku and HPC’s Pandemic Response

June 24, 2020

In stark contrast to past years Thomas Sterling’s ISC20 keynote today struck a more somber note with the COVID-19 pandemic as the central character in Sterling’s annual review of worldwide trends in HPC. Better known for his engaging manner and occasional willingness to poke prickly egos, Sterling instead strode through the numbing statistics associated... Read more…

By John Russell

ISC 2020’s Student Cluster Competition Winners Announced

June 24, 2020

Normally, the Student Cluster Competition involves teams of students building real computing clusters on the show floors of major supercomputer conferences and Read more…

By Oliver Peckham

Hoefler’s Whirlwind ISC20 Virtual Tour of ML Trends in 9 Slides

June 23, 2020

The ISC20 experience this year via livestreaming and pre-recordings is interesting and perhaps a bit odd. That said presenters’ efforts to condense their comments makes for economic use of your time. Torsten Hoefler’s whirlwind 12-minute tour of ML is a great example. Hoefler, leader of the planned ISC20 Machine Learning... Read more…

By John Russell

At ISC, the Fight Against COVID-19 Took the Stage – and Yes, Fugaku Was There

June 23, 2020

With over nine million infected and nearly half a million dead, the COVID-19 pandemic has seized the world’s attention for several months. It has also dominat Read more…

By Oliver Peckham

Supercomputer Modeling Tests How COVID-19 Spreads in Grocery Stores

April 8, 2020

In the COVID-19 era, many people are treating simple activities like getting gas or groceries with caution as they try to heed social distancing mandates and protect their own health. Still, significant uncertainty surrounds the relative risk of different activities, and conflicting information is prevalent. A team of Finnish researchers set out to address some of these uncertainties by... Read more…

By Oliver Peckham

[email protected] Turns Its Massive Crowdsourced Computer Network Against COVID-19

March 16, 2020

For gamers, fighting against a global crisis is usually pure fantasy – but now, it’s looking more like a reality. As supercomputers around the world spin up Read more…

By Oliver Peckham

[email protected] Rallies a Legion of Computers Against the Coronavirus

March 24, 2020

Last week, we highlighted [email protected], a massive, crowdsourced computer network that has turned its resources against the coronavirus pandemic sweeping the globe – but [email protected] isn’t the only game in town. The internet is buzzing with crowdsourced computing... Read more…

By Oliver Peckham

Global Supercomputing Is Mobilizing Against COVID-19

March 12, 2020

Tech has been taking some heavy losses from the coronavirus pandemic. Global supply chains have been disrupted, virtually every major tech conference taking place over the next few months has been canceled... Read more…

By Oliver Peckham

Supercomputer Simulations Reveal the Fate of the Neanderthals

May 25, 2020

For hundreds of thousands of years, neanderthals roamed the planet, eventually (almost 50,000 years ago) giving way to homo sapiens, which quickly became the do Read more…

By Oliver Peckham

DoE Expands on Role of COVID-19 Supercomputing Consortium

March 25, 2020

After announcing the launch of the COVID-19 High Performance Computing Consortium on Sunday, the Department of Energy yesterday provided more details on its sco Read more…

By John Russell

Steve Scott Lays Out HPE-Cray Blended Product Roadmap

March 11, 2020

Last week, the day before the El Capitan processor disclosures were made at HPE's new headquarters in San Jose, Steve Scott (CTO for HPC & AI at HPE, and former Cray CTO) was on-hand at the Rice Oil & Gas HPC conference in Houston. He was there to discuss the HPE-Cray transition and blended roadmap, as well as his favorite topic, Cray's eighth-gen networking technology, Slingshot. Read more…

By Tiffany Trader

Honeywell’s Big Bet on Trapped Ion Quantum Computing

April 7, 2020

Honeywell doesn’t spring to mind when thinking of quantum computing pioneers, but a decade ago the high-tech conglomerate better known for its control systems waded deliberately into the then calmer quantum computing (QC) waters. Fast forward to March when Honeywell announced plans to introduce an ion trap-based quantum computer whose ‘performance’ would... Read more…

By John Russell

Leading Solution Providers

Contributors

Neocortex Will Be First-of-Its-Kind 800,000-Core AI Supercomputer

June 9, 2020

Pittsburgh Supercomputing Center (PSC - a joint research organization of Carnegie Mellon University and the University of Pittsburgh) has won a $5 million award Read more…

By Tiffany Trader

‘Billion Molecules Against COVID-19’ Challenge to Launch with Massive Supercomputing Support

April 22, 2020

Around the world, supercomputing centers have spun up and opened their doors for COVID-19 research in what may be the most unified supercomputing effort in hist Read more…

By Oliver Peckham

Australian Researchers Break All-Time Internet Speed Record

May 26, 2020

If you’ve been stuck at home for the last few months, you’ve probably become more attuned to the quality (or lack thereof) of your internet connection. Even Read more…

By Oliver Peckham

Nvidia’s Ampere A100 GPU: Up to 2.5X the HPC, 20X the AI

May 14, 2020

Nvidia's first Ampere-based graphics card, the A100 GPU, packs a whopping 54 billion transistors on 826mm2 of silicon, making it the world's largest seven-nanom Read more…

By Tiffany Trader

15 Slides on Programming Aurora and Exascale Systems

May 7, 2020

Sometime in 2021, Aurora, the first planned U.S. exascale system, is scheduled to be fired up at Argonne National Laboratory. Cray (now HPE) and Intel are the k Read more…

By John Russell

10nm, 7nm, 5nm…. Should the Chip Nanometer Metric Be Replaced?

June 1, 2020

The biggest cool factor in server chips is the nanometer. AMD beating Intel to a CPU built on a 7nm process node* – with 5nm and 3nm on the way – has been i Read more…

By Doug Black

Summit Supercomputer is Already Making its Mark on Science

September 20, 2018

Summit, now the fastest supercomputer in the world, is quickly making its mark in science – five of the six finalists just announced for the prestigious 2018 Read more…

By John Russell

TACC Supercomputers Run Simulations Illuminating COVID-19, DNA Replication

March 19, 2020

As supercomputers around the world spin up to combat the coronavirus, the Texas Advanced Computing Center (TACC) is announcing results that may help to illumina Read more…

By Staff report

  • arrow
  • Click Here for More Headlines
  • arrow
Do NOT follow this link or you will be banned from the site!
Share This