Utililty computing: The shift to software as a service has already happened

In 2008, the popular trend website, trendwatching.com, outlined a number of observations about changing consumer habits. Two in particular resonated – the rise of a concept called “transumerism” and the observation that consumers are moving rapidly towards becoming “trysumers”.

Transumerism is where people are driven by experiences rather than objects and try at all costs to avoid the hassles of permanent ownership. Trysumers are described as “transient, experienced consumers who are becoming more daring in how and what they consume, thanks to a wide range of societal and technological changes”.

While these two trends were originally outlined in terms of response to mass consumer goods, there is a strong link forming between how people consume mass market goods and technology offerings such as Google, Facebook, iTunes, and how, in a business context, these same people are moving away from a fixed, on-premise and “owned” IT infrastructure to a model of software as a service. The current (and future) generation expects IT simply to work – to be available 24/7 and to deliver what they expect – both at home and at work.

This is not a future-focused prediction – it’s happening now in businesses across the world. If we look at the history of IT as we know it, there have been three major shifts – firstly with mainframe computing, which then moved towards the PC and client server era and now, we’re very much in the throes of the software as a service era.

Large companies, however, are not instantly going to be able to walk away from previous investments and an entrenched IT department. Any changes in how people consume IT don’t just suddenly happen – they can take a number of years. But software as a service is already here and has been for years, so in essence the theory behind Nicholas Carr’s “Big Switch” idea has already become reality.

The shift away from “owned” IT was first noticeable in the SME sector, which no longer needed or could justify funding large IT departments to make their businesses work. SMEs were the first to realise that by using web-delivered applications, they could focus on their business and deliver on their core strengths, rather than worrying about whether a clunky old server they had purchased would just work the way it was meant to. There is also a high cost reduction involved for small businesses through not requiring a dedicated IT department, or specialist on hand, in the event of technical problems with the server.

Proof points on how this is working – and how it is rapidly building steam – are all around us. My former company, Salesforce.com, has more than 30,000 customers in the UK alone. At Velocix, we host and deliver large digital assets such as video, software and games over the web. For a new media company to set up and manage back-end systems capable of delivering rich media to its customers takes a big investment both in physical spend and in time resources. Being able to buy such a service on a subscription basis frees up resources to focus on the core business activities.

As larger organisations see how nimble and flexible those using utility computing can be, we will definitely see this era grow and develop. Large enterprises will require their IT departments to change focus from being “maintainers” to helping them plan and implement smaller projects using “pay as you need” services.

There will not be a sudden shift and in terms of software being delivered as a service we are most definitely already there, but what we will see is the growth and maturity of this computing era.