Cloud Services as a Utility…

Posted by on Sep 10, 2012 in Blog | 0 comments

By allowing companies to remove the initial capital expenditure and day to day management of hardware and software, cloud computing has generated a phenomenal amount of publicity globally. Services are now available as an on-demand, metered computing solution, charged on a consumption basis.

The business model has drawn comparisons with gas, water and electricity, what we think of as the more traditional public utilities. However, to what extent are these actually valid? The market for utilities has undergone quite drastic change over the last decade – services are as always widely available, but can now be activated quickly and easily, be switched on and off within days if not hours and consumers can migrate suppliers whenever they desire.

Thus, we define a utility as a typically mature industry, supplying ‘commodity’ products of a homogenous nature, which are governed by certain standards and are independently regulated. It appears that cloud services have not quite reached that level of maturity. The variation of services available to cloud users means that it is very difficult to compare products on a like-for-like basis. In a similar way, the changing demands of business’ means that cloud computing at this stage must be flexible enough to cope, thus cannot be constrained to a specific list of ‘best-practices’ or an industry wide code of conduct.

Many providers may use the term ‘utility service’ when referring to cloud computing, as it evokes the feeling of automated billing, freedom of choice and hassle free service migration, however strictly speaking it may be some time before a unified service can be created with the varying needs of business in mind. However, one thing’s for sure, a good deal can be found in a market which is very much in its infancy. If perfect competition were ever truly viable, the closest thing possible can be found with cloud services. That is at least until Google, Apple or Microsoft start turning the screws.


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