Pay-As-You-Go IT Services: A Dose of Reality
March 29, 2004
Saugatuck Technology presents keynote
address and market survey results at the utility computing conference
�On Demand Strategies for Business 2004,� held in New York City March
23 and 24.
Westport, CT (PRWEB) March 27, 2004�-Adding a dose of reality to
UtilCompWorld 2004 � Saugatuck Technology presented the results of a
soon to be released market survey on Pay-as-you-go (PAYG) IT services.
With presentations from senior IT executives from Guardian Life and
Deutsche Bank, among others � as well as a variety of vendor keynotes
and panels � the proceedings were filled with the promise of utility
computing, and the use of technologies such as virtualization and
Chairing the first day of the conference, Bill McNee, Founder and CEO
of Saugatuck Technology, opened the event by framing many of the key
benefits and challenges associated with utility computing and PAYG
services. McNee then introduced Saugatuck�s groundbreaking study
focused on buyer activity and perceptions related to PAYG IT services,
which were presented in more detail later in the day by Michael Isaac,
a Senior Program Director at Saugatuck.
Among the highlights � nineteen percent (19%) of 310 CFOs and CIOs
surveyed stated that their organizations were already using one or
more PAYG IT services. Thirty seven (37%) percent expect to be using
PAYG IT services within two years. This suggests that the market for
PAYG IT services � whether IT infrastructure or application driven �
will quickly move beyond its early adopter phase.
In many ways, a key issue for users and vendors alike is whether the
infrastructure and core business applications will evolve fast enough
to support this emerging demand. A playful discussion panel with Hal
Stern, CTO of Sun Services, Philippe Lamy, Chief Technologist at HP,
Dev Mukherjee, VP Strategy at IBM and Pete Manca, Senior VP at Egenera
highlighted many of the technical challenges only now beginning to be
addressed, including issues related to virtualization.
Interestingly, Saugatuck�s study also found that large rather than
small-to-medium enterprises were leading the charge, and in many cases
with hybrid implementations that leverage the best of both existing
in-house IT services with variable PAYG services. Unfortunately, due
to the lack of clarity in the market, many senior executives are
viewing the decision to utilize PAYG IT as an all-or-nothing decision.
�Buyers are not yet thinking about a hybrid model in which external
PAYG resources seamlessly supplement in-house resources,� said Isaac.
�The potential savings are enormous, especially for situations with
highly variable application or infrastructure requirements that just
aren�t justifiable using traditional fixed-cost models.�
The formal research report, entitled �Pay-as-you-go� IT Services:
Where�s the Business Value? will be published in early April 2004 by
Saugatuck Technology and research partner CFO Research Services.
The company provides research-based consulting services that combines
business planning and market assessment with first-hand research of
executive technology buyer trends. Founded in 1999, Saugatuck is
headquartered in Westport, CT (www.saugatech.com 1-203-454-3900).
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