Skeptical about on-demand

Computerworld - Despite the vendor buzz surrounding on-demand computing, many IT managers have been left scratching their heads, wondering exactly how this model might benefit their businesses.

"[Users] like the concept," says Corey Ferengul, an analyst at Meta Group Inc. "However, it's so big, so hard to grasp that it seems unattainable and comes across as marketing. All the right words are there; now the users require translation to action."

In fact, a recent Computerworld online survey of 765 IT professionals shows that 50% are somewhat skeptical and 14% are very skeptical about the future of on-demand computing models. Their top concerns? The most-often cited was cost, followed by the fear of getting locked into proprietary vendor systems and, finally, security. Other IT managers say they worry about turning over control to an outside service provider or another business unit in their organization.

CONCERN: Cost
Damien Bean, vice president of corporate systems at Hilton Hotels Corp. in Beverly Hills, Calif., points out that with hardware costs so low, users can simply buy their own servers to meet peak demand.

"It's cheaper for me to buy another box rather than worrying about configuration changes," notes Bean. "When I look at the economics of operating big systems, hardware is no longer a great constraint. If hardware is not a large component of the cost structure, is doing all the negotiation and putting everything in a shared physical environment worth it?"

Dee Taylor, IT manager at Trace Die Cast Inc. in Bowling Green, Ky., agrees. "With the price of servers today, you can really afford to have some extra," he says.

But many analysts and vendors argue that cost savings will be realized if companies increase capacity only 20% by pooling servers to crunch computing jobs consecutively. And those savings, proponents say, will come primarily from reduced labor to maintain the systems -- and not necessarily from lower hardware costs.

That argument doesn't ring true for Hugh Honts, network operations manager for the Marion County Board of Commissioners in Ocala, Fla. "Servers are so cheap now, and Microsoft has finally come out with free or inexpensive tools such as [Microsoft Operations Manager]. So why would you do something so complex as grid or on-demand computing?" he asks.

"It wouldn't surprise me that [on-demand] is another way for hardware and software vendors to make money," Honts adds. In fact, several analysts agree that drastically declining costs of processors and servers have forced hardware makers to find other revenue streams, such as management software to handle on-demand computing.