How Utility Computing Works

The Basics of Utility Computing

The principle of utility computing is very simple: One company pays another company for computing services. The services might include hardware rental, data storage space, use of specific computer applications or access to computer processing power. It all depends on what the client wants and what the utility computing company can offer.

Many utility computing companies offer bundles or packages of resources. A comprehensive package might include all of the following:

  • Computer hardware, including servers, CPUs, monitors, input devices and network cables.
  • Internet access, including Web servers and browsing software.
  • Software applications that run the entire gamut of computer programs. They could include word processing programs, e-mail clients, project-specific applications and everything in between. Industry experts call this particular kind of business "Software as a Service" (SaaS).
  • Access to the processing power of a supercomputer. Some corporations have hefty computational requirements. For example, a financial company might need to process rapidly-changing data gathered from the stock market. While a normal computer might take hours to process complicated data, a supercomputer could complete the same task much more quickly.
  • The use of a grid computing system. A grid computing system is a network of computers running special software called middleware. The middleware detects idle CPU processing power and allows an application running on another computer to take advantage of it. It's useful for large computational problems that can be divided into smaller chunks.
  • Off-site data storage, which is also called cloud storage. There are many reasons a company might want to store data off-site. If the company processes a lot of data, it might not have the physical space to hold the data servers it needs. An off-site backup is also a good way to protect information in case of a catastrophe. For example, if the company's building were demolished in a fire, its data would still exist in another location.

Utility computing rates vary depending on the utility computing company and the requested service. Usually, companies charge clients based on service usage rather than a flat fee. The more a client uses services, the more fees it must pay. Some companies bundle services together at a reduced rate, essentially selling computer services in bulk.

What are the pros and cons of utility computing? We'll explore that in the next section.