Five years from now, CIOs and the businesses they serve will look back on the mid-2000s as the time that 'on-demand' computing started to emerge as a viable model for enterprise computing.
This new paradigm in computing will give companies access to agile IT infrastructures that grow and adapt to the needs of their businesses.
Traditional computing models are increasingly becoming associated with waste and stagnation. Gartner says most IT departments spend 80% or more of their budgets to 'keep the lights on' and very little on innovation and delivering new business value.
Under computing "on-demand", companies will initially buy services such as e-mail or storage space from third-party service providers in the same way as they pay for electricity or water.
The promise of computing on-demand is that companies will eventually be able to buy business processes (such as payroll or billing) on tap and pay only for the capacity that they use rather than having to build expensive infrastructures that are fully used only in peak periods, if at all.
Companies are able to access computing power when they need it, allowing them to be more responsive and flexible to changing market conditions. This model turns IT into a variable cost, eliminating most of the capital investment and fixed running costs associated with ensuring the smooth running of the technology infrastructure. It eliminates the waste associated with building an infrastructure to cater for occasional spikes in demand, freeing up budget for other projects.
The most important benefit of computing on-demand, however, is that it will enable companies to have access to IT resources that can rapidly adapt and scale to the changing needs of a turbulent business environment. This flexibility is of paramount importance in a market where most CEOs don't know what tomorrow will bring.
Of course, the transition towards computing on-demand is likely to take place over a number of years and service providers will start off by offering it in areas such as storage and e-mail. The industry still has a great deal of work to do in setting the standards and creating the management tools that will support utility computing.
In the long run, however, most organisations will increasingly migrate to computing on-demand and, in so doing, minimise capital investments in underused servers, and storage and network capacity designed to meet occasional maximum demand. That's one of the prime reasons that Business Connexion has invested R150 million in a new data centre that is ready for on-demand computing.
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