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Issue of October 2003 

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Utility Computing

Utility Computing revealed

Before you jump into utility computing, here's a hard look at the realities of this service. by Joy Tang

The basic concept of utility computing has been around for years. Get computing power in the same way as water or electricity, in consistent amounts that is 'always-on,' and pay only for what is used.

The expanded concept of utility computing couples business and IT, so that IT tasks can be prioritized according to business objectives through SLAs. This in turn allows the cost of uptime or downtime to be more accurately calculated.

It will result in an IT manager being able to tell, which applications are affected by a server failure, right down to which business transactions would have to be cancelled—all in dollar terms. And if resources are pooled, the server failure may even go un-noticed as relatively idle servers are automatically re-tasked to pick up the slack.

Utility computing breakdown

While utility-based computing has been available for some time, new solutions are emerging.

To IBM, utility computing is a component of its on-demand strategy and refers to delivering infrastructure and business processes as a service, either on a pay-per-use basis, or through outsourcing. In addition, the company said that e-business-on-demand users should have integrated, open, virtualized, and autonomic infrastructures, to better respond to surges in traffic, and have 'virtual sharing, management and access to devices across an enterprise, industry or workgroup.'

Two of IBM's on-demand initiatives are grid computing and the autonomic computing initiative. Grid computing allows the handling of a single task across network resources, whereas autonomic computing makes software and servers that can optimize, configure, protect and heal themselves.

The company already offers eServers, which feature autonomic computing, and its existing WebSphere architecture and Tivoli management tools, coupled with the DB2 database and Linux, are expected to back the company's on-demand effort.

HP's utility computing vision includes Capacity on Demand (iCOD), both 'instant' and temporary. In the instant mode, users can turn 'on' extra power as required and pay for it. In the 'temporary' mode, users pay for the extra capacity for as long as they use it.

There is also Pay Per Use (PPU), a usage-based lease program where the equipment may reside with HP or at the customer site.

K Sudershan, Director, Infra-structure Solutions, Enterprise Systems Group, HP Asia Pacific, said that businesses like to have large equipment expenses off the balance sheet so that they do not have to carry the depreciation expense.

"PPU is an excellent option for a customer's capitalization strategy as well as their technology strategy. 40 percent of all Superdome servers were acquired through the PPU model," he revealed.

Utility computing is a subset of HP's Adaptive Enterprise strategy, where business is driven by an IT infrastructure that responds to changes in real-time, which is what HP's Utility Data Center (UDC) had been designed to do.

The UDC includes software, multivendor hardware, and services that optimize IT asset usage and allow administrators to architect new systems and activate them with a 'drag and drop' approach, said Sudershan.

"A pool of servers, storage and network devices are wired once to support virtual allocation of resources for the entire system," explained Sudershan. "As the resources are virtualized, they can be dynamically allocated without having to rewire any physical components."

In the quest for an adaptive enterprise, users can also stabilize their infrastructure with the help of HP OpenView modules like Operations, Network Node Manager, and Performance Insight.

K.P. Naidu, Director of Infrastructure Solutions, Asia-Pacific, Sun Microsystems said that all of Sun's solutions, from hardware, OS, to grid solutions, are enabled for utility computing.

The company offers its N1 framework, which features virtualization, provisioning, and policy automation, as well as accounting on a per service basis, but does not consider N1 utility computing per se.

"Customers want to match compute resources to business demand, align costs to activity, and improve asset utilisation," said Naidu.

CA rolled out its on-demand strategy in April with self-healing, provisioning, asset management, and helpdesk tools.

Unicenter Network and Systems Management (NSM) 3.1, which gives an overview of infrastructure based on the services it supports, was introduced together with Unicenter NSM Dynamic Reconfiguration Option, which monitors business service levels, plans for additional capacity, and allocates it across multiple platforms.

The NSM option will be available within six months, as will CA's new Sonar technology, which provides detailed resource allocation based on business priorities, said CA's consulting director, Sherwin Wong.

"Whenever an accountant uses a package for transactions, we can analyze the network and draw a map of its consumption—a business topology," added Wong. "Before, when there were five applications on a server, no one could differentiate which applications were consuming which resources."

Storage and Services

The commoditization of storage, together with dynamic storage provisioning and storage resource management, have turned storage into a no-brainer utility.

Major storage players already have utility-based solutions, like Veritas' SANPoint Control, which discovers all storage devices in the network and manages them in a policy-driven manner, and Storage Central, a storage resource manager.

Veritas OpForce offers a similar solution for the servers, enabling hardware to be shared among different applications, and features automated re-imaging and provisioning, while Veritas i3 analyzes total system performance, identifies the root causes of performance problems, and helps correct them.

Better tracking of user-defined IT services will be available through Veritas Service Manager, which is expected to launch in Q4'03.

"It gives visibility to IT asset usage by business unit and paves the way to 'charge back' expenses," explained Alvin Ow, Technical Consulting Manager, Asia South, Veritas.

EMC uses the concept of Automated Networked Storage to show how its software, platforms and networked solutions can simplify storage management. The company's OpenScale storage asset and financial management programme features automated billing for the networked storage infrastructure, including storage capacity, SAN switch ports, NAS servers and storage software, said Ajit Nair, director, Technology Solutions Group, EMC South Asia.

Utility-based services

In the service provider realm, Atos Origin offers utility-based services. "Its SLAs have dropped the percentage utilization of capacity in favor of the computing capacity productively used by the application," said Atos Origin's Nilesh Nerurkar, General Manager, Managed Services (MS). Srikanth Seshadri, Senior Consultant, MS, agrees to this statement.

Service fees are based on a combination of transaction volumes, number of devices, and data volumes. "Servers, networks, storage and the related financial models from technology vendors still have gaps that restrict the options for offering a complete seamless

utility-based service in a cost-effective manner," Nerurkar said. "In the next nine to 12 months, technological developments will bridge the gap."

Anything that can save money is an attractive proposition, but utility computing solutions may not come cheap. However, Sun's Naidu said that users do not have to invest very much to gain the pay-per-use benefits. "It's as simple as looking at the environment and improving capacity utilization," he said.

Even so, anecdotal ROI claims can be impressive. Atos Origin, for instance, estimated that TCO for IT services delivered on a utility model could fall by 20-30 percent. "The quantum of savings achieved depends on the amount of services that are converted to a utility model," said Nerurkar and Seshadri.

Simon Ho, Country Manager, Veritas Hong Kong, said utility computing can provide high availability without recourse to expensive hardware.

"We can provide high availability on demand to users at a 50 percent saving on traditional high-availability platforms," he said. He also described how Veritas i3 had led to an Asian retail customer improving its IT performance.

"Consultants were suggesting that they buy more hardware. Instead, they deployed i3 and found that it was not a hardware problem, but an implementation problem. They delayed their relatively expensive hardware purchase," he said.

And according to HP's Sudershan, HP Labs,' the use of the HP Utility Data Center to consolidate its worldwide IT infrastructure will allow it to scale to more than eight times its current capacity in the next few years without adding staff.

"Millions of dollars could be saved as 1,000 servers could be operated by fewer than 20 people—five times the ratio of servers to people used in most data centers today," he said.

Trouble in paradise

Clearly, utility computing means different things to different people—and some have chosen to keep a distance for now.

Damian Crotty, Dell's director of Advanced Systems Group in the Asia-Pacific, said that, "Utility computing means either outsourcing, which is a concept that has been around for over three decades, or overpaying for proprietary systems with excess capacity, and that ultimately limit flexibility."

Plus, it's early days yet, with few customer testimonials out there. "According to a Merrill Lynch survey of CIOs in the US and Europe, respondents doubt utility computing will materialize, certainly not before 2006 or 2007. What IBM and others are proposing is based on old proprietary technologies with a new marketing effort," Crotty added.

Rakesh Kumar, an analyst with the Meta Group, concurred that utility computing will not be real till 2007 or so, and said, "Vendors will create sophisticated marketing programs to repackage existing offerings targeted at non-IT executives, often packaged with essential and expensive consultancy services."

Meta Group argued that fundamental weaknesses will remain in vendor offerings as well as in the organizational processes for users to handle the models at least until 2005.

"Without critical evaluation of both, many users will suffer inappropriate contracts, paying too much for the wrong technology and not being able to account prudently for all costs," warned Kumar.

Further, Atos Origin cautioned that only server OSs launched in the past year are offered as a utility-based service, and many applications are not geared for this due to licensing schemes. Vendor lock-in could also occur if the solutions do not support third-party products, or which will only work with other products from the same vendor to deliver utility computing.

Security is another problem with utility computing, said Dell and Symantec. Glenn Gunara-Chen, Consulting Manager of Symantec Asia Pacific, recommended that utility computing should not be adopted where critical or sensitive data are concerned.

"If one client wants strong security and another client has weak security, then the security of the shared infrastructure is weak," he contended.

Moreover, business needs should be considered before rushing to implement utility computing. Sun's Naidu said users often make the mistake of not understanding the actual business environment. "Simple business models do not work," he pointed out.

And as EMC's Nair observed, outsourcing storage may not save money, a warning that could easily apply to utility computing as a whole.

"Companies may face additional cost because they didn't take into account certain variables like increased application loads and rapid information growth. Storage-on-demand means exactly that. You will get charged for every bit of storage demand growth. So plan carefully," he advised.

In addition, getting management buy-in can be tough for utility computing. "Getting the businesses to buy into a differentiated delivery of IT services based on what they are willing to pay is a new concept that needs to be accepted," observed Nair.

CA's Wong agreed. "Users need to manage service levels, not availability or response times. They need to explore how to do this."

In fact, Meta Group predicted that over 80 percent of global organizations, with their sophisticated accounting tools, will find a utility-driven environment with its irregular cash flow, granular payment schedules, and complex internal cross-charging, hard to swallow.

"Organisations evaluating such offerings must combine their IT, procurement, and accounting groups to evaluate financial return on new contracts and how the cost of internal processes will need to change to manage them," Kumar advised.

Asian Culture Clash

Another obstacle could be Asian culture, which usually flows top-down. "The hardest thing will be to change the culture. It's easy to talk about change in the classroom, but it is hard to change in the real world," observed Captain Payoongsak Silagul, Vice-President, Information Technology (Operations), Ayudhya Allianz CP Life PCL. AACP is a HP user hoping to improve quality of service through best practices.

One success story is JBWere, an Australian investment house which began the process to provide IT services on a pay-per-use basis to its end-users in 1999. Thomas Higgins, Chief Technology Officer, JBWere, has found ITIL (IT Infrastructure Library), a set of best practices for IT service management, crucial to utility services. "Before ITIL, we didn't know the true cost of running IT products and services. We couldn't make rational decisions," he admitted.

ITIL provides a way to charge for IT services that is understood by everyone in the organization, he explained. "Without a common language, you have human miscommunication issues, and then service delivery problems."

Higgins said ITIL allowed the IT department to negotiate SLAs more precisely, for instance. When IT did not cost anything, one department asked for no downtime at all, he said. They changed their minds when told the IT costs would need to triple, and that the cost would come from their departmental budget.

However, management has to demonstrate a strong commitment to enforcing ITIL, Higgins said. One of JBWere's biggest challenges was to make its IT service catalogue real. "Until we start getting people to bill and charge their time to it, it's just another taxonomy," he recounted.

Utility computing may be more challenging than the vendors have painted it to be and hype abounds, but this won't stop the wave of new techniques which could enable enterprise IT to work better and align more closely with business goals. "This is the year more solid roadmaps have become available," said CA's Wong. "The awareness is there."

Taking the time to understand what different solutions can achieve, being aware of potential problems, and starting small can place users on the leading, rather than the bleeding, edge.

This article first appeared in Network Computing Asia

Implementation Checklist

  • Understand the different solution approaches.
  • Identify business needs and see if a utility computing model can meet these needs.
  • Identify all internal IT processes and document service level definitions.
  • Visualize the utility-based architecture you want for your servers, storage, and network.
  • Optimize resource utilization.
  • Define the unit of computing and financial models for metering and charging based on it (changes needed at the IT, procurement, and accounting department level).
  • Ensure software licensing matches the hardware utility model and can scale as needed.
  • Set policies and create tiered SLAs covering performance monitoring, disaster recovery, security and backup/restore, and clearly state the obligation of the service provider with regards to data confidentiality, integrity and availability. In the case of storage, there should be policies on information availability, quick provisioning, configuration management, and change management.
  • Focus on automating provisioning and management.
  • Link business processes to IT events such that business managers can understand how computing resources are allocated.
  • Ensure data is protected and encrypted at all times.

Source: Atos Origin, CA, Dell, EMC, HP, Symantec, Veritas

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