IBM throws weight behind utility model

By Jaikumar Vijayan

November 4, 2002 12:00 PM ET

Computerworld - NEW YORK -- IBM's $10 billion "on-demand" initiative announced by CEO Samuel J. Palmisano here last week echoes efforts by rivals to help companies deploy IT as a utilitylike service that can quickly expand or contract with business needs (see story).
But getting to such a flexible -- and ostensibly more cost-effective -- architecture will take time and require a radically different approach to buying and using computer systems, users and analysts said.
"This is all wonderful to talk about in theory," said David Krauthamer, MIS director at Advanced Fibre Communications Inc., a manufacturer of telecommunications equipment in Petaluma, Calif. But in reality, the task of moving to it is "incredibly complex," Krauthamer added.
Still, the concept is an alluring one.
"Companies are tired of making one-off investments in IT," said Ted Schadler, an analyst at Forrester Research Inc. in Cambridge, Mass. As a result, "there is a shift going on toward a commoditization of the infrastructure," he said. "It's going to help users get more value out of their assets and will transition them from a pay-upfront model to a pay-as-you go model, which characterizes any mature industry."


IBM CEO Samuel J. Palmisano

In a speech outlining his strategic vision for IBM over the next few years, Palmisano said the company will deliver the building blocks for this on-demand architecture. Such an architecture could be hosted by IBM or be deployed by companies internally with IBM's assistance, he said.
IBM has created an organization called On-Demand that's focused on developing capabilities in this area through its own research and development and through acquisitions, Palmisano said. The company is opening four On-Demand design centers around the world to help companies test the concept using IBM Web services, Linux and grid computing technologies, he said.
Driving the effort is growing user angst over the complexity of managing IT networks and the gross underutilization of resources that current approaches have created, Palmisano said. "We are seeing a fundamental shift that is irreversible," he said.
On-demand systems like those proposed by IBM will lead to better utilization of computing resources, reduced complexity and lower ownership costs, said William Siegle, CIO at Ace INA Holdings Inc. in Philadelphia.
And they could help businesses drastically reduce the upfront costs for technology, said Mike Prince, CIO at Burlington Coat Factory Warehouse Corp. in Burlington, N.J. "There's always been an obstacle that you don't begin to see the ROI until the thing's deployed," which could be six or nine months down the road, Prince said.
Business Justification
Other

Recommend Digg Twitter ShareThis

Email Print Send Feedback Reprints

Additional Resources

Xerox

Win a color printer!

By using solid ink technology only from Xerox, you could save up to 65% by printing color for the cost of black and white. Enter for a chance to WIN a PhaserTM 8860 network color printer!

Microsoft

Upgrade to Internet Explorer 8 today.

Save time and mitigate security risk. Deploy it now.

Sybase

NEXT-GENERATION MOBILITY PLATFORMS

In this white paper, IDC analyzes the role of next-generation mobile enterprise platforms as organizations seek a more strategic deployment of mobile solutions.

Learn the important issues you must consider before starting your next mobility initiative. Get your mobility white paper from IDC now, compliments of Sybase.

White Papers & Webcasts

A Truly Global HCM System
Learn about a system built with advanced object-oriented technology that support multi-national requirements and costs less to implement, maintain and upgrade....

Usability Is Everything
Learn what sets Workday's HR and Payroll solutions apart from the competition....

Moving Beyond Monolithic - What's Next for Enterprise Application Architectures?
This white paper reviews the current state of enterprise application architecture and presents a prediction on what might come next....

SaaS at Flextronics, Inc.
Dave Smoley, CIO of Flextronics, discusses the real value of software-as-a-service and why he chose Workday for his HR solution....

The Shortcut Guide to Managing Certificate Lifecycles
(Source: Thawte) If you have ever shopped for a certificate, you know that there is a wide selection of products and vendors from...

Agile Enterprise Content Management (ECM) for Rapid ROI
Find out how combining ECM and BPM will help adress issues about content rich business processes....

MarketVibe: Communications and Collaboration Needs at Business Organizations
In April 2009, IT and business leaders were invited to participate in a survey on business communications and collaboration solutions. The goal of...

Modernizing the IT Infrastructure
(Source: Oracle) There is a lot of legacy in many government IT systems today - legacy hardware, legacy software platforms, and legacy skills...

The Value of Network and Application Visibility by Aberdeen
This survey-based paper analyzes best practices for improving application visibility and analysis. This paper can help serve as a guideline for organizations looking...

Taking the Service Desk to the Next Level
Listen to this conversation with Doug Mueller to learn how standards and processes have evolved to bring us the service desk of today...

All White Papers | All Webcasts