Welcome, loyal readers, to the Labor Day issue of GRIDtoday. Although some might take advantage of a national holiday as an excuse not to publish, we remain steadfastly dedicated to giving you the week’s most relevant news from the on-demand ecosystem. And in the true spirit of Labor Day, this week’s issue features a story about easing your workload and giving your overworked datacenter much-needed relief.

I’m speaking, of course, my piece on the growing grid hosting market, which is aimed at offering companies all the flexibility of distributed, grid-like architectures without the hassle of actually having to manage them. Given the sector’s past success with primarily hosting Web servers, it shouldn’t come as any surprise that the majority of grid hosting customers has thus far been from the Web 2.0 community, as these customers place a premium on scalability and high availability in case they become the next big thing, but don’t be mistaken: These providers want to win over mainstream enterprises, as well.

The problem, however, is that this industry faces several challenges, including: a general leeriness about outsourcing; a general lack of understanding about utility computing; and a fair amount of competition. We’ve covered the first one a million times here, but in this case I think it is surmountable, as I believe these types of hosted grid solutions really do promise customers enough where they will at least be willing to get on the phone and have someone explain to them why outsourcing is safer and more efficient than might previously have thought.

The second one, however, is a little more difficult, as utility computing (as you’ll see when we go into some detail on it later this month) means a lot of things to a lot of people. When you start throwing around that word, as well as “grid,” people tend to get confused. In this case, the initial connotation might be one of sheer computing power on-demand, which, while definitely a feature (especially with some of Layered Technologies’ capabilities), doesn’t address the real value proposition for these types of solutions, which really is all about scalability, availability and reliability in an easy-to-use, cost-effective model.

And, finally, these companies face a lot of competition when trying to draw in mainstream users. On top of the more-established names (e.g., Sun, HP and IBM) offering their outsources, on-demand utility computing solutions, grid hosting providers also have to deal with a spate of vendors (including Cassatt and 3Tera, among others) offering utility computing and all of its inherent benefits in an in-house model, which definitely will sit better with some nervous CIOs who are willing to spend the money managing their datacenters rather than take the risk of relying on hosted resources. Plus, they also have compete with the numerous other companies that also choose to define their solutions using terms like “grid,” “utility” or “on-demand” — and all of these vendors have something unique to offer, as well, when it comes to application performance.

At the end of the day, though, I have to believe grid hosting will take off as its proponents expect, because momentum is growing behind the concepts of on-demand functionality and convenience, and anyone legitimately offering these is going to see some success. In addition, although many companies are still hesitant about outsourcing, the hosting providers have become pretty well-accepted among the IT set, so they already have gained a fair amount of goodwill thanks to their adeptness in the core competency of hosting resources. When these two things combine, it would appear to be a recipe for success.

Moving on to the rest of the news, last week was pretty slow, but there still are some items worth checking out, including: “3Tera Brings Utility Computing In-House”; “UTEP Gets $5M for Cyberinfrastructure Center”; “UC4 Intros Latest Version of Datacenter Automation Tool”; and “AMD Highlights Key to Managing Virtualized Infrastructures.”

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Comments about GRIDtoday are welcomed and encouraged. Write to me, Derrick Harris, at [email protected].