Irish execs welcome pay-as-you-go technology


13 Oct 2005

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New research says that 66pc of Irish executives favour a pay-as-you-go approach to IT resources, saving money currently spent on servers or storage hardware that are not used to capacity. Though most companies in Ireland are interested in leveraging some type of utility computing there is a lack of understanding of the business benefits and technology implications.

“While vendors see huge opportunities in utility computing there is still a disconnect between what vendors are saying it can do and what IT buyers understand it can do,” says Oisín Byrne, managing director of iReach.

The iReach report, entitled Can Utility Computing Promises Deliver Value Today? identifies stepping stones to deliver here-and-now cost savings and business value benefits through the concept of utility computing.

“It’s real and it’s going to happen but it’s unlikely to be a big bang. The report demystifies the hype and comes up with clear opportunities to start on the road to utility computing with some building blocks that are available today and can have a very positive impact on the cost of IT,” says Byrne.

Roland Noonan ]query[ of Horizon Open Systems, which commissioned the iReach report, believes that the biggest barrier to implementation of utility computing is culture, not technology. “The technology is already here. But everyone thinks their data centre is unique which is not the case.”

Interviews with 100 Irish executives revealed that their No 1 priority is about reducing operational costs over the next two years, and with average server and storage utilisation at only 25pc of total capacity, the case becomes clear for a utility approach.

The report claims hardware spends can be reduced by as much as 40pc by investing in current technologies such as virtualisation, which maximises latent hardware resources and delivers on the utility concept.

The confusion among customers about utility computing stems from different definitions and brand names that have grown up around it. IReach defines the different flavours, such as grid and on-demand computing, as a single approach that “provides users with computing power on demand (similar to electricity)”.

Noonan stresses that utility computing is simply the aggregation of demand. “It’s not about technology – it’s a concept.” Already he can see a number of multinational corporations with operations in Ireland and overseas adopting virtualisation as a first step.

“If you have a design centre in Dublin and one in Colorado then when the guys in Dublin are asleep it makes eminent sense for the people in Colorado to access that valuable computing power that would otherwise be lying idle for 12 hours of the day.”

Industry wise he sees the financial services sector and oil and gas as early adopters of utility computing.

IReach estimates that the global utility computing market will be worth €20bn by 2008. It will mature over the next five years, first gaining popularity with hosted service offerings leading to the growth in composite applications from 2007 to 2010.

Utility computing will lead to leaner, more flexible IT infrastructure driven by a revolution in data centre architecture that will address issues around wasteful technology, laborious processes and rigid business capabilities.

The report findings suggest that by 2008, server utilisation rates could improve from 25pc on average today to more than 40pc on average on the back of virtualisation technology deployments. In real terms, the report says, it means that companies will spend less on hardware, software licenses and enable personnel to be redeployed into higher-value roles.

By Ian Campbell