February 3, 2005
(Computerworld)
Sun Microsystems Inc. will allow its grid computing users to buy and sell CPU hours on an electronic trading market, just like any other traded commodity, under a plan announced today.
Corporate users in search of computing time, as well as speculators, will be able to bid on CPU hours through Archipelago Exchange Inc., a Chicago-based electronic stock exchange. Trading won't begin for three to six months, a Sun official said.
This ability to buy and sell CPU hours is an outgrowth of Sun Chairman and CEO Scott McNealy's belief that compute cycles and storage are a basic utility. "It's the electricity that's the commodity, not the generators," he said.
That's how McNealy described the first part of his plan earlier this week to allow users to purchase CPU hours at $1 per hour and storage at $1 per gigabyte per month from Sun Grid.
For a corporate buyer, this is how the trading might work: A company that has bought 10,000 CPU hours through the Sun Grid compute utility plan and discovers that it needs, for example, just 8,000 hours could sell the unused CPU hours on the exchange.
Although Sun is using the $1 charge as its pricing threshold, large volume purchasers may be able buy at a figure less than that, said Aisling MacRunnels, senior director of utility computing at Sun. But the market price, at least initially, will be $1 per CPU hour.
"We feel like we set the value at a dollar," said MacRunnels. "We don't know what the exchange price fluctuation will be. That will depend on utilization rates."
In his book Does IT Matter? Information Technology and the Corrosion of Competitive Advantage (Harvard Business School Press, 2004), Nicholas Carr argued that IT is being commoditized, and he sees Sun's move on grid as an illustration of that trend. Carr said that upward of 90% of a company's IT spending goes to basic infrastructure. "That's a large percent of expenditures that, in fact, can move to an utility model.
"I think Scott McNealy has seen the future. The question now is have Scott McNealy's customers seen the future? That remains to be seen," said Carr. "But I think the IT market is going to move in this direction. What's uncertain is how quickly it will move in this direction."
Sun sees early users of its Sun Grid to be high-performance computing users, particularly those in financial services, oil and gas exploration, and life sciences. They also believe application service providers will use it as a vehicle to host applications, and by software developers.
Christopher Willard, an analyst at Framingham, Mass.-based market research company IDC, said these technical users have "an insatiable appetite" for compute cycles and are also in a better position to try out new computing concepts. But users will also have to be convinced that security is tight and that data can be handled swiftly on the grid.