Users should not rush into adopting the utility-based
computing model being proposed by suppliers, delegates at last
week's Gartner Symposium were warned by analyst Rakesh
Kumar.
Kumar said users should be wary of how utility-based pricing for
software would work in practice. It is "very difficult if not
impossible" for software companies to build a viable business case
for a variable usage-based licensing model, he said.
Major software suppliers are monitored on the financial markets
by contracts that are sold and regular income coming in. "If you
try to shift this from a fixed income to a variable income,
depending on your business cycle, Wall Street will not like it,"
said Kumar. As a result, users may find that the utility-based
licensing they signed up to may be subject to sudden change, he
warned.
There are also caveats to the usage-based model even when
dealing with a hardware provider, where usage-based pricing is
better understood, he added.
Moving to a four-year usage-based contract for storage including
servers and software can seem attractive. But users need to
consider whether fixed-price contracts will give sufficient value
in a market where hardware prices are consistently falling.
Another problem area for usage-based licensing is how to pass
the cost of IT to an end-user department. The business may not be
prepared for "granular" charge-back of IT services, preferring an
annual fee instead, Kumar said.
Despite these problems, Gartner said virtualisation technology
would eventually give IT directors a completely different way to
buy and deliver IT services and chargeback to the business than has
been possible in the past.
Kumar predicted that over the next 10 years IT directors would
increasingly buy from their hardware suppliers based on usage.