Information technology is undergoing a transition from being unforgiving of assets that the company itself to be a service that they purchase from utility providers. Three technological advances enabling this change: virtualization, grid computing and Web services. Virtualization blurs the distinction between ownership of computing platforms, allowing applications designed to run on any operating system that will be deployed in other locations. Grid computing enables a large number of hardware components, such as servers and disk drives to operate effectively as a single unit, the union of their potential and the distribution is automatically different jobs. Web services standardization of interfaces between applications, turning them into modules that can be assembled and disassembled easily. As a result, industry is likely to have three main components. The center will be IT companies themselves - large companies that will support major computing resources in central plants and distribute them to end users. Service utilities will be a variety of components suppliers - manufacturers of computers, storage units, networking equipment, operating and utility software, and applications. Finally, the large network operators will support ultra-high-bandwidth data transmission lines needed to run the system. This is a shift from domestic capital asset to a centralized utility overturn strategic and operating assumptions, alter industrial economics, upset markets and pose daunting challenges for each user and the provider. "Hide
by Nicholas G. Carr Source: MIT Sloan Management Review 9 pages. Publication Date: April 1, 2005. Prod. #: SMR172-PDF-ENG
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