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On-Demand's Tire-Kickers
These IT managers are giving on-demand a close look, but they aren't fully sold. Here's a look at their hopes for this new computing model, and their key concerns.
June 28, 2004 (Computerworld) --
On-demand computing is a concept some IT managers have held up to the light and turned around a few times. But while the computing model has clearly captured their interest, they're not 100% sold on it. Like others in the IT field, they're taking a slow and cautious approach. In fact, industry experts say that while some users have already deployed applications that take advantage of utility computing for a specific function or business requirement, for most users, the road to on-demand will be an iterative process that will take years, if not up to a decade, to complete.
"I think we'll continue to see pilot projects in the short term over the next several years, with more enthusiasm and deployments building as more of the technologies necessary for utility computing come to market," says Jamie Gruener, an analyst at The Yankee Group in Boston. These developments include integrated data center automation and virtualization tools, easier-to-understand pricing models and improved capabilities to establish and maintain service levels across multiple technology layers within the data center. "It won't happen overnight," Gruener says, "but a number of larger customers have already begun the journey, with midsize customers starting to pilot programs this year and going forward."
Gordon Haff, a senior analyst at Illuminata Inc. in Nashua, N.H., agrees that on-demand will be a gradual migration. "We will reach a point where applications won't have to sit on this particular server with this much memory," he says. "Instead, there will be a pool of applications, and you won't have to worry about which server is actually running it."
Computerworld talked with three CIOs who are examining the on-demand computing model. Here's what they had to say about what they hope it can deliver, what they're concerned about and what it will take to convince them.
Harry Roberts Senior vice president and CIO, Boscov's Department Store LLC
• Computing environment: In addition to a z900 enterprise server, Boscov's data center houses an RS/6000 running customer resource management, business intelligence and data mining applications. It also has a server farm made up of IBM xSeries PCs. All of these systems are connected to two 3.2TB Shark storage-area networks (SAN) from IBM and support about 700 users. Outside the data center, there are 2,500 desktop PCs (mostly IBM), 3,500 point-of-sale devices and a number of Unix servers running in-store applications.
"We're trying to position ourselves to be more open-source-oriented so that we can move our software to whatever architecture we have spare capacity on," says Roberts. "We're not quite there yet, but we hope to be in a couple of years."
• Hoped-for benefit: The ability to better align computing costs with the monthly revenue stream.
• Biggest concern: A lack of third-party software.
Like most retailers, Reading, Pa.-based Boscov's goes into peak computing mode two months of the year, during the November-to-December holiday shopping season. And like most retailers, the company pays year-round for the hardware and software to support that peak period.
Roberts is intrigued by the idea of on-demand computing, where the company would pay only for the computing resources it uses. "Our software is priced based on the capacity of the hardware we're using it on. So we're paying not just for hardware but for the software, based on our peak capacity," he says.
An on-demand model would not only theoretically reduce Boscov's IT costs, but it would also better align computing costs with each month's revenue.
But while Roberts sees great potential and has spoken frequently with IBM about its on-demand computing architecture, he still sees areas that need to be worked out before on-demand computing is feasible. For instance, there's the question of independent software vendors. "We haven't seen our third-party software vendors step up to the plate and have a complementary program to IBM's," Roberts says.
In addition, a move into IBM's on-demand architecture would require Boscov's to replace its IBM z900 server, since IBM's on-demand plan is focused around its z990. "To justify the necessary investment of retooling our shop, there would have to be some tangible percentage reduction in cost, and I don't know how on-demand is going to achieve that," Roberts says.
• What it will take to convince him: Roberts says he wants proof that on-demand will result in a lower total cost of ownership. "To date, there aren't enough details to make me comfortable that it will achieve my goals," he says.
Roberts also wants to see the third-party software vendors come to the table with licensing models that match on-demand architectures. "Everyone has to be in agreement," he says.
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