Systems/Enterprise:

UTILITY COMPUTING NEEDS BETTER PRICING TO PRODUCE REAL SAVINGS

Businesses have analyzed TCO using a paradigm based on a set of assumptions such as perpetual processes, single delivery method and stovepipe solutions. According to a recent Yankee Group report (Analyzing Utility Computing's Total Cost of Ownership), as IT transitions from a cost-center model to a profit- or service-center utility, the new paradigm must account for variations in duration, volumes and prices in business processes.

"Utility computing promises to reduce the IT costs associated with time and consumption commitments," said Andrew Efstathiou, Yankee Group Business & IT Services program manager. "These commitments will be tied directly to business need. To achieve that vision, the management layer of utility computing must be developed further and enterprises must become more sophisticated in their approach to analyzing, negotiating and purchasing utility IT services to drive business value creation."

Most current metering tools are vendor-specific and will not monitor all products. However, system infrastructure management software vendors are developing capabilities that will enable business-process-based TCO analysis. BMC Business Service Management Strategy, which utilizes the IT Masters MasterCell product; VERITAS' CommandCentral Service 3.5; Computer Associates' CA Common Services; HP's OpenView; IBM's Tivoli; and Mercury Interactive's Topaz and SiteScope are leaders in this area. IDC believes the winners will be vendors that develop both functionality and databases of operating performance to drive informed prospective analytics.