Utility computing isn't totally new, Tapper said. Before the 1990s, IBM and EDS acted as computer service bureaus, and in the 1990s Web hoster Exodus and application service provider Corio offered related approaches. Tapper indicated that utility computing spending wouldn't rise significantly until after 2008. Indeed, IDC's survey of companies -- whose average annual revenue was about $7bn, or about £4.3bn -- suggests computing is not on the cusp of taking off as a utility like electricity. Queried on utility arrangements, 19 companies said they would not like their computer resources to be located offsite and shared by more than one customer. Almost half were interested in creating what IDC referred to as an "in-house private utility", in which technologies such as virtualisation and grid computing were installed on the company's own systems. Ten companies said they were interested in a third party managing their "private utility". IDC also found that companies are not only cautious about utility computing, they also have high demands. Surveyed companies prefer a one-year contract -- far shorter than the more typical outsourcing deals, which can span three, five, seven or 10 years, Tapper said. He said companies seem to fear being "locked" into a particular service provider. What's more, companies expect cost savings from the deals averaging 28 percent. "Customers want massive cost reductions," Tapper said. At the same time, companies worry about issues including the financial stability of providers, whether costs could escalate, the possibility that their data could be stolen and whether utility computing service is feasible in the first place.
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