Personal view online: The pros and cons of utility computing

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Utility computing – or software-as-a-service, or countless other similar labels – was hotly debated in the first of Digital Business’s Personal View Online features.

A succession of senior executives and prominent experts have been giving their views in their own words, resulting in a collection of 10 articles offering a range of opinions and advice, which can be read in full at www.ft.com/digitalbusiness/utilitycomputing.

Views range from strong support for the software-as-a-service idea: “It looks as though utility computing has finally come of age” (Mike Irwin of Webroot), through to the cautious: “Corporate consumers of external services still have to overcome the twin challenges of trust and cost; trust that the website delivering the services will still be there tomorrow and the cost of survival if one of the key business processes disappears overnight” (Marc Davies of CSC).

Among the more positive writers is Phill Robinson, chief executive of Velocix: “As larger organisations see how nimble and flexible those using utility computing can be, we will definitely see this era grow and develop.” And Jeremy Roche, chief executive of Coda, believes that when SaaS platforms become trusted, we could see an increasing proportion of the market move this way.

The benefits of SaaS are succinctly stated by Mike Webb, chief executive of iHub: “With hosted services, all changes can be managed quickly and easily via a PC. Managers can point and click for system updates while sitting at their desks and avoid third-party reliance and the associated costs.”

Kishore Swaminathan, chief scientist at Accenture, lists the advantages as: “Lower IT costs, faster deployment of new IT capabilities, an elastic IT infrastructure that can expand or contract as needed, and most importantly, a CIO freed from the more mundane aspects of managing the IT infrastructure.”

Serguei Beloussov, chief executive of Parallels, explains why the Saas model could not have been deployed five years ago: “Service providers could not sweat their infrastructure hard enough for the SaaS model to make financial sense. This has changed with developments in virtualisation and automation technology.”

The consultants are more circumspect. SaaS does not mark the end of IT departments, writes Bob Tarzey of Quocirca, but it is going to change how their job is done, with more time to focus on the high level business benefits of IT.

One simple question needs to be asked by those responsible for IT spending in their organisation, according to Mike Reid of Sapient: “How much value do we gain by doing this in-house?”

Alastair McAulay of PA Consulting argues that there are three steps.

First, “recognise that within most organisations of more than 100 people there are unique business requirements where the IT involved does have to be tailored to individual circumstances”.

Second, “acknowledge that there may well be cases where legacy information systems are working pretty well”.

Third, “identify where there really are IT areas that can be sensibly commoditised and handed over to an IT utility service provider”.

Read Mr McAulay’s conclusions and all these articles in full via the Digital Business home page – and if you are inspired to write your own contribution, then e-mail it to us at digitalbusiness@ft.com, where it can be considered for online publication.

The second Personal View Online debate, on IT in Financial Services, is running from June 2 until Friday (June 20), with features by senior industry figures, which can also be viewed via the Digital Business home page. The third series of Personal View Online articles, on companies’ Web 2.0 strategies, begins on Monday June 23.

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