In this interview, Sharon Green, Director of Utility Computing at EDS and Bill Mooz, Senior Director of Utility Computing at Sun discuss what is driving the utility computing market, how it differs from the ASP/MSP model, and what is next on the utility computing horizon.

Ben Tamblyn - UtilityComputing: Do you see the development of computing in terms of technological evolution or business evolution?

Bill Mooz - Sun: We view utility computing from four aspects. There is a technology aspect, a financial model and business aspect and, very importantly, a change management aspect. The processes you need are different, the expectations and way of doing things within the business will need to change very dramatically. I think that the first wave of utility computing, has focused primarily on the financial and business model aspect. The initial utility computing solutions that we have seen operate with a variable pricing model on top of a traditional service model and a traditional technological model. What we're now seeing is a move into the next phase where providers and customers are beginning to address this change model and the technology model with the goal of achieving greater efficiency.

The existing financial model delivers two key benefits:

-- a greater ability to align your IT expenditure with IT activity, which should hopefully correspond with the level of business activity.

-- The second thing that is obtainable but not always delivered through utility solutions is a more granular understanding for the business, as to what their existing IT costs are and how they will be impacted by moving to different financial models.

This provides all organizations with the potential to move from traditional block-billing -- a one-size-fits-all to a situation where the enterprise can understand the cost of adding new applications, or making a cost comparison depending as requirements fluctuate. However, unless you address some of the technological and service delivery aspects (e.g., autonomic capabilities and virtualization), the granular level of business understanding I have mentioned often does not become visible to the business decision makers.

Sharon Green - EDS: I think to a large extent utility computing needs to be business led. If you don't deliver the business results, regardless of what the technology is doing, you will never achieve the desired results that directly support the creation of competitive advantages and the delivery of overall business objectives. We have started with a pure financial model and are constantly adding things to our utility computing offering, and now we're looking at how we can deliver genuine business billing. For example, making sure we can charge on an investment in utility computing that directly affects the business, emphasizing variables such as the business activity enterprise customers are involved in.

UC: What do you see as the key market drivers for utility computing?

Mooz: I think that the key market drivers for utility computing are creating economic efficiency by reducing ongoing operational costs and improving levels of scalability and performance. If you look at typical procurement cycles for enterprises today, to move from

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