ASP to SAAS to Clouds -- Oh my!

But the real consumers of utility computing are more likely to be large enterprises. Network service providers, already delivering bandwidth solutions to those enterprises, are well-positioned to lead the enterprise cloud computing market as well — despite strong competition from large computing and systems integrator companies, including IBM and HP/EDS.

The cloud race is under way. AT&T launched its Synaptic hosting service this summer, combining utility computing, security and storage capabilities with managed networking. Verizon, meanwhile, is targeting its cloud computing launch for the first quarter of next year, building those capabilities into five data centers worldwide. “There's no way that [computing] infrastructure is not going to be consumed that way; it's just going to happen,” said Christopher Gesell, director of global product marketing for Verizon Business.

T-Systems, the systems integrator division of Deutsche Telekom, made its mark offering SAP ERP software implementations in its homeland. It is now offering those SAP apps in a virtualized, on-demand environment, with about 10% of its SAP implementations now offered as cloud services. “That utility mind-set is now permeating all the services T-Systems offers, from desktop management to other facets of hosting,” said Greg Garrett, senior vice president of business development and strategy for T-Systems.

From owning the network to having experience in selling services (rather than hardware or software products), service providers have a major advantage in the cloud game, Garrett said.

“IT companies don't know how to play the utility game. But it's a fundamental part of our DNA, from the way you manage the network to the way you manage finances,” Garrett said, adding that T-Systems believes it has a further advantage by taking what he says is the lead in integrating its IT and telecom sides.

“We didn't fully integrate IT and telecom operations until this year, but it's a story we've been telling the market for three years; it's a big differentiator for us,” he said. “We are integrating operations from the customer interface level all the way down to the guys operating data centers. We are all pulling in the same direction now.”

That's a strategy that SaaS vendor Jamcracker advocates as well.