Adventures In Utility Computing

The business of utility computing.

Saturday, May 13, 2006

A major shift in the industry's fundamental economics

I have been meaning to start a blog on the business aspects of Utility Computing. This is an area where I have focused my efforts in the last few years of my career, a shift in the way people will buy applications and computing. A recent Fortune FastForward article headline has prodded me to begin. It states:

Microsoft's cash versus Google
The software giant's plan to build datacenters the size of 10 Costcos, complete with electrical substations, signals a major shift in the industry's fundamental economics

I believe that the shift in this direction happened many years ago for those so inclined to look for these type of shifts.

First a little background on myself. I have spent the last 11 years working at a wonderful company, Sun Microsystems, led by a truly visionary leader, Scott McNealy. Scott has been evangelizing the future of computing starting with Sun's tagline "The Network is the Computer" and pushing the "big friggin webtone switch".

The trouble for Sun is that it is hard to convert a business model built around selling hardware to one built around selling computing as a utility. Sun's move into Utility Computing, selling CPU cycles at $1/CPU hour, is a step in the right direction placing Sun in the position to become a public utility for CPU cycles.

It seems that more and more people are starting to understand the shift in the industry's economics. There are a lot of efforts moving the industry further in the direction of Utility Computing. Going forward I will write about these efforts and how utility computing will impact us all.

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