Executive says IT should be a utility

Internet visionary Marc Andreessen, chairman and founder of two-year-old Web infrastructure startup Loudcloud Inc., told attendees at Oracle Corp.’s OpenWorld developer conference earlier this month that organizations should begin using the technology that runs Web sites and Internet applications like a utility.

Pointing to recent trends in the way companies manage data storage, in which servers and storage devices are connected over a switched network and users can allocate more or less storage for an application at will, Andreessen said companies should take a similar approach with the rest of their IT infrastructure.

“Storage has gone through a really profound change in the last five or ten years. It has become much more of a utility,” Andreessen said during his keynote presentation here Tuesday. “I think the rest of the technology in a company’s infrastructure needs to be a utility-like service the same way storage is being treated.”

Companies will benefit from treating everything from database software, to application and Web servers and networks, as utilities. Rather than being responsible for providing the hardware to run every new Web application it wants to use, a company could simply plug in new applications to an infrastructure provided by an outside company.

“If an application one day needs more compute capacity, it can get it. If the next day it needs less you can shrink it down,” he said.

Loudcloud is building its business on this concept, which it calls utility-based computing. The managed service provider hosts Web sites and Internet applications for a number of major media organizations such as Gannett Co. Inc.’s USA Today and large enterprise customers such as Ford Motor Co.

From the company’s central network operations centre, Loudcloud monitors and maintains each of its customer’s IT systems with its proprietary software platform, called Oppsware. In cooperation with data centres around the United States and Europe, Loudcloud deploys Oppsware to automate the process of monitoring a system, fixing bugs, patching holes and reconfiguring hardware.

The benefits of this model include the ability to quickly relocate a company’s IT department in the case of a major catastrophe, such as the Sept. 11 attacks, Loudcloud says. It is also considered a less costly way of running an IT department, transferring the burden of maintaining every piece of software and hardware to a third-party host.

“(The utility approach) has been talked about before,” said Joe Kokinda, a senior technical analyst with Kenexa Technologies Inc., a technology consulting company based in Wayne, Penn. “It always seems to come up when people start thinking about cost savings. It does make sense and it does benefit the industry, but it’s going to take a couple of years.”

Within the next five years, the onslaught of new Web applications will place a burden on IT departments to the point where outsourcing the management of their IT systems will be even more important, Andreessen said.

“(Outsourcing) is where companies are really going to cut costs,” said Samer Khubeis, assistant secretary general for the Royal Court of Jordan, who attended Andreessen’s keynote. “If these (outsourced) systems get to be very proficient, I think it will work very well for IT organizations.”

Security and confidentiality stand in the way of some organizations outsourcing their Web applications, Khubeis said. In the case of managing government computer systems, such as in Jordan, there is a real security concern when handing data over to a third-party hosting company.

Loudcloud has just begun to address confidentiality. In his presentation, Andreessen alluded to the first customer that will use Loudcloud’s Oppsware management software internally. Whereas Loudcloud usually hosts its customers’ systems from its network operations facility, an unnamed U.S. government agency has agreed to build an Oppsware system in its own data warehouse. Andreessen called this technique “in-sourcing.”

“We’re going to do that with large organizations one by one,” he said.

One notable company that has taken an “in-sourcing” approach to Web application deployment is America Online Inc., Andreessen said. With its own technology, the Internet giant has built a generic IT infrastructure, stocked with application servers, Web servers and storage devices, into which it can easily plug new applications, Andreessen said. “It works really, really well,” he said.

Loudcloud, in Sunnyvale, Calif., can be reached at http://www.loudcloud.com/

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