The Big Stretch

Nick Carr and I agree on the concept of utility computing and how it should manifest itself in software and hardware as services. I disagree with him (like here) about the time to market. While utility/SaaS computing is the focus in his forthcoming book The Big Switch,  I see tortoise like speed in the way larger outsourcers are deploying those models.

So he sees an industry milestone when Cap Gemini announces an initiative around Google apps. Cap briefed a few Enterprise Irregulars today, and I was eager to see how a major outsourcer has embraced utility/SaaS concepts. But I heard little of that. They emphasized it was less of a cost play, more of a collaboration play especially to bring "disenfranchised" employees on the shop floor and elsewhere for who no one licensed MS Office tools for. More about "innovation" in their desktop support practice, and  expansion to handle PDAs and other devices beyond PCs.

Google Apps provide a bunch of functionality, hosting, storage all for $ 50 a user a year.  Outsourcers like Cap charge that much a month for help desk, desk side type services. I was hoping Cap would tell me how Google has inspired them to change their own delivery model. But there was little of that. Like I have written about EDS before - little overt change in their own business model.

Two of the biggest spend categories in technology are in outsourcing services and in telecomm services. Vendors in both categories do not really innovate much but instead pounce on innovations in software, hardware to sustain their large revenue streams. Till that changes, Nick's vision will remain a stretch goal for the industry.

Update: Dennis Howlett perspective. And Michael Krigsman. And Phil Wainewright. The 4 of us are the EIs Cap  presented to. 

Comments

[Bert Armijo]

Perhaps you're looking in the wrong place.

This reminds me a little of the trouble analysts had tracking Linux. They were so used to measuring sales that they had no way to deal with something that was free.

Similarly, gauging the state of utility computing by looking to large system integrators predefines your result. The future of IT is being defined on the web.

Utility computing is already happening in the web space. Both Amazon's EC2 and 3tera's AppLogic have production applications up and running on them. Attend any developer conference and you'll find people talking about how to leverage these.

[vinnie mirchandani]

Bert, actually I agree with you. Last year I wrote 2 companion notes - one what is happening in the "minors" with EC2 et al (see link below) and what is happening in "majors" with big outsourcers and larger customers. The majors are where most of the dollars are and the progress is grudging...

http://dealarchitect.typepad.com/deal_architect/2007/02/utility_computi_1.html