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IBM's $10 billion 'on-demand' gamble

A look at IBM's plans for on-demand computing and where Web services fit into the plans

The Web Services Advisor
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IBM's $10 billion "on-demand" gamble
Late last fall, IBM announced a massive, $10 billion "on-demand" computing initiative, which it promised would forever transform IT and the way that companies use computing resources. In this first part of a two-part column, we'll look at IBM's plans for on-demand computing, and see where Web services fit into the plans -- and in fact, see that they may be ultimately the underpinning of the entire project.

What is on-demand computing?
Before we can see how Web services fits into IBM's on-demand world, we need to first understand what the term means. To a great extent, it's an amorphous buzzword that takes in a lot of territory and seems to mean different things to different people.

One way that IBM describes it is by calling computing a utility just like any other -- for example, when you turn on a faucet you get water. In the same way, when you want computing power, you turn on the virtual tap, and it is delivered to you. To a certain extent, IBM's first big announced customer for on-demand computing is using the technology that way. Petroleum Geo-Services (PGS) normally uses huge server farms to crunch massive amounts of data in its search for oil by performing complex tasks such as seismic imaging. In January PGS announced a contract with IBM in which IBM will provide it with computing power on demand for a deep-water seismic imaging project in the Gulf of Mexico that will help the company in its search for oil. PGS says that by employing computing on demand rather than building out huge server farms for the project, it will be able to save $1.5 million per year. The savings will come because PGS will only need its peak computing demand a certain percent of the time, so it won't have to build an infrastructure to meets peak demand and can instead build a smaller infrastructure and then rent computing power from IBM when it needs peak computing power.

On-demand computing goes beyond this utility model, however. It also includes autonomic computing, which are computers, networks and systems that are "self-healing" and can to some extent manage themselves without human intervention. And it also includes grid computing, in which computers and devices on a network are all part of a single grid, and their resources can be used for tasks when they otherwise might be idle. IBM has also defined on-demand computing so broadly that it includes being able to manage a business and IT department as an integrated whole.

The ultimate goal of IBM's on-demand computing platform, says Bob Sutor, IBM's director for Web services technology, is "It has to be flexible, it has to let you respond to changing market conditions and the changing requirements placed on you by your customers, and it has to let you respond to changes as quickly as possible."

Where do Web services fit in?
According to several IBM technologists -- and according to IBM's white papers about on-demand computing -- Web services are at the core of IBM's on-demand computing plans.

For example, when it comes to grid computing, "Web services become the underpinning," says Kerrie Holley, an IBM Distinguished Engineer. "It's what allows you to implement a grid services architecture. You have to have an open, agreed-upon way to describe the services the grid will provide, and Web services stands an awfully good shot at being that standard."

But Holley says that Web services will form the basis of much more than just grid computing -- it may be the underpinning of most of IBM's on-demand computing architecture.

"In the world of the future, you'll need to be able to choreograph different business processes, and identify, discover and locate them with a high degree of security. The Web services standards need to mature in order to do this, but they'll eventually let us reach this environment where we can access external business processes with separate systems and avoid a variety of physical and technological barriers."

IBM's Sutor echoes Holley's thoughts. "Web services is the concrete technology" that can tie together aspects of on-demand computing," he says. "It's an important part of how you build and on-demand e-business." By easily tying together heterogeneous systems, Web services can make businesses more flexible and more easily connect to business partners and allow them to build those applications quickly, which is at the heart of on-demand computing, he notes. Autonomic computing, as well as grid computing, will require common interfaces, and Web services may ultimately be the glue that holds it all together, he says. "On-demand computing requires open standards like Web services and XML," he concludes.

Where are the products?
Don't expect this grand vision to arrive at your computer or network any time soon -- instead, expect incremental improvements. Holley says that we may be five to ten years away from taking full advantage of true autonomous computing, powerful grids, and an architecture in which you can in essence turn on a virtual tap and get computing resources in the same way you get water when you turn on your water tap. But when that future arrives, he believes, Web services will lead the way.

Ultimately, IBM's grand vision is rather amorphous, and to a certain extent, on-demand computing is as much a marketing ploy as it is a set of specific, coherent technologies. However, there are a set of products focused around on-demand computing and Web services that can make much of IBM's vision happen, notably WebSphere. In my next column we'll take a closer look at those products and how they fit into IBM's on-demand computing future.

Continues in Part Two

About the Author

Preston Gralla, a well-known technology expert, is the author of more than 20 books, including "How the Internet Works," which has been translated into 14 languages and sold several hundred thousand copies worldwide. He is an expert on Web services and the author of a major research and white paper for the Software and Information Industry Association on the topic. Gralla was the founding managing editor of PC Week, a founding editor and then editor and editorial director of PC/Computing, and an executive editor for ZDNet and CNet. He has written about technology for more than 15 years for many major magazines and newspapers, including PC Magazine, Computerworld, CIO Magazine, eWeek and its forerunner PC Week, PC/Computing, the Los Angeles Times, USA Today, and the Dallas Morning News among others. As a well-known technology guru, he appears frequently on TV and radio shows and networks, including CNN, MSNBC, ABC World News Now, the CBS Early Show, PBS's All Things Considered and others. He has won a number of awards for his writing, including from the Computer Press Association for the Best Feature in a Computer Publication. He can be reached at

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