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Service Provider Utility Model

For service providers, the utility model works in two ways, providing a possible three-way utility model. The manufacturer sells the resource to the service provider, who, in turn, (through domain technology) provides a utility model solution to a customer of the service provider. FIGURE 2 illustrates a service provider utility model.

Figure 02FIGURE 2 Service Provider Utility Model

This method is attractive to all parties involved. For example, the manufacturer is able to sell at an agreed discounted price; the service provider is able to sell the resource at three times 70 percent of cost; and the end-user is able to purchase their required resource at 30 percent less than the list price.

This example is based on a two-million dollar purchase of resource and intends to solve the widespread problem of resource wastage, which is based on a typical customer typically never using more than 30 percent of purchased resource.

On a $2 million purchase of resource, 70 percent waste equates to $1.4 million.

In this example, the customer or business unit is in a position to capitalize on service management, and impose agreed financial penalties on an IT resource supplier that doesn't meet service level agreements. The customer or business unit is not in a position to best manage the utilization of IT resources. This responsibility belongs to the IT function.

If a business unit or cost center (for example of a financial institute) owns five high-end servers each using 30 percent resource, the organization will not realize the full return on investment that is initially expected. Based on the previous example, this would be a waste of 3.5 million dollars.

A utility model affords a way of providing controlled and accountable computing resources for organizations, departments, and business units within a company, or to a customer sourcing its resource from a supplier. However, charging organizations or departments for such utilization has, in the past, proved inherently difficult to gauge accurately. The solutions offered in Part II of this article provide an answer to this issue.

Combining a number of commercially available products to create a robust and flexible control, regulation, and metering solution provides the interface between the business support systems/operational support systems (BSS/OSS) and the service platforms that actually run the business. In effect, these software products extract the resource utilization data, and turn this data into billing information that is both accurate and real-time.

In addition, there is a need to proactively manage the availability of such resources and report the availability data in an accurate and effective manner. The management of availability can be accomplished through the use of resource analysis, workload consolidation, and capacity and service level management.

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