2 How significant does the article suggest utility computing will become? In the early days of the internet, visionaries talked of computing becoming a utility. Users would plug into the internet for their data just as they plug into the wall for electricity or turn on a tap for water. As the internet boomed, many new companies were set up to transform this vision into a reality.

Enormous sums were invested in building infrastructure for application hosting providers (AHPs)

and application service providers (ASPs). Their mission was to manage software that could be accessed by customers over the internet. ‘Software as a service’

took away the need for an organization to worry about IT, so it could concentrate on its own business.

The model makes a great deal of sense, but is only immediately attractive to new organizations without an existing computing infrastructure. Dotcoms were natural customers and they signed up in droves.

However, when the internet bubble burst, the customer base and market contracted dramatically.

Most of the new players closed down, restructured or changed direction.

Nevertheless, the analyst community believes that the concept of software as a service has a long-term future. ‘There is clear recognition that software as a service, in some form, has value to customers’, says David Friedlander, who is responsible for IT services at Giga Information Group, the analysts.

There are a number of differences between an ASP and an AHP. The ASP charges a fixed monthly amount per user that includes use of all software, as well as hardware. The AHP charges for the hardware and operating systems, but requires the customer to buy a full licence for the application software in advance.