Utility computing can cut IT costs, says report


14 Mar 2006

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Utility computing can deliver cost savings by reducing hardware spend by up to 40pc, a new report carried out on behalf of Horizon Open Systems by iReach estimates.

A recent survey of 100 Irish executives by iReach revealed that the number one priority of these executives is to reduce operational costs over the next two years.

Estimates suggest that hardware remains the largest element of IT spend and will exceed €1bn in Ireland this year against a total IT spend of €2.2bn.

Due to the reducing cost of hardware, the solution to many performance or security issues amongst Irish businesses is to deploy more servers.

iReach suggests that on average only 25pc of server and storage capacity is utilised in Irish organisations. Maintenance and management overheads for servers and storage remain intensive, leading to a high total cost of ownership.

iReach points out that at present average server and storage utilisation is at only 25pc of capacity.

It suggests that utility computing — getting computer power on demand (similar to electricity) — can help organisations maximise existing server and storage capacity, delivering significant cost savings in reducing hardware spend by 40pc.

According to iReach, some 66pc of executives prefer to pay for computing resources on a pay-as-you-go basis. “No business today builds and owns utilities such as electricity, gas, water and telecommunications. All of these services are sourced and consumed as requires,” the report says.

By John Kennedy