The utility approach

Larry Ellison’s most famous utterance proclaiming the network is the utility now in 2001 has literally become that which he figuratively declared some seven or eight years ago.

Enterprise network communications may be moving in a direction towards what’s being called the communications’ “utility.” The term hardly has a definitive meaning at this early stage. Most systems/network integrators and other external network service companies who either offer or plan to introduce communications service utilities see the concept somewhat differently. However, a general definition might describe a communications utility as a set LAN and/or WAN provisioned by an external service provider to a business customer, as a managed service. The utility would be built to meet a set of either generic or specific performance and reliability requirements and would be provisioned, managed and owned by an external service provider. The network infrastructure itself would be built and owned by the external service provider, who in turn charges some type recurring operational fee to the customer. In actual fact, the customer would pay the entire cost for the network, but could do so in an easier payment structure.

The customer and communication utility provider would enter into an agreement, which would cover at least three, but more likely five years. A service level agreement would, among other things, spell out performance and reliability criteria as well as provide for technology refresh. That would mean upgrading the network to ensure the performance parameters can be achieved and/or ensure that the platform is capable of supporting new applications, which a business may choose to implement.

“One of the ideas with the utility is to help clients predict what their costs will be,” said Rod Joyce, a network consultant with IBM Canada in Markham, Ont. “I think one of the most compelling value propositions for the network utility is the ability for a client to turn a capital expenditure into an operational expenditure.”