Monday, October 15, 2007

So does "utility computing" mean we'll each buy generators?

While Rob and I have both blogged about the differences between compute utilities and electric utilities (Rob here and I in one of my most popular posts here), the computing world in general continues to use the electric utility analogy when talking about utility computing.

Way back in March of last year I took Nick Carr to task (well, that may be overstating it a bit--he's a hell of a writer and technologist--let's just say I "attempted" to take him to task) for concluding that utility computing would lead to the death of the server market. "Nonsense," I said: "did the advent of electric utilities spell the death of the generator market?"

So it was with great amusement that I read Nick's latest post ("Caterpillar: Web 2.0 giant"): He says one of the big winners in the Web 2.0 boom is none other that Caterpillar. Caterpillar? Yep, Caterpillar. In addition to the equipment that makes our highways, they make the generators that power the information super highway (well, at least the generators used to supplement or backup existing power sources). Caterpillar's large generator sales are up 41%, and there is a year-long wait for a 2MW model.

In other words, the generator market is booming. It hasn't been killed by the electric utility industry. I maintain the same thing is true of computing: utility computing sure as hell won't kill the server market.

There's one other aspect to this: these generators are so important and selling so well, even though they are primarily used as backups. These datacenters buy power as cheaply as possible (think hydro electric). This incredible demand for generators exists because power is so very important; its ubiquity and utility have made it critically important. Datacenters need these expensive generators just in case their main power sources go down.

The same may be said of the server market. As more and more companies become dependent on utility computing, they will require more servers, not fewer. As John Clingan said:

Value drives adoption. Adoption drives volume. Volume drives down price. Lower price results in broader applicability. Broader applicability results in more servers.
In other words: the more important servers get, the more will be sold.

So why is all of this important? Well, again, the metaphor is dead.

But if electric utilities haven't killed the generator market, why would compute utilities kill the server market?

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