IBM today announced that it has expanded a service that enables businesses to access virtual computing capacity on demand over the Internet.
IBM's Virtual Server Service now lets customers tap into virtual server capacity hosted on the iSeries, as well as the pSeries and xSeries systems, paying only for the computing power and capacity they require. Instead of the physical Web, database and application servers they rely on now, customers tap into "virtual servers" through an IBM hosting center.
In July 2002, IBM introduced virtual server capacity with the availability of Linux virtual services on the zSeries mainframe.
This marks a major expansion of IBM's strategy to deliver e-business on demand, said John Madden, an analyst with Boston-based Summit Technologies.
"The idea here is to simplify the data center, and IBM has been on this track for sometime," he said. "And obviously, the interest has been strong [in the mainframe offering] to bring it out to the rest of its server line."
Virtual computing is a key component to the on-demand strategy. On-demand, in its simplest form, is a strategy intended to deliver computing resources the way a power utility doles out electricity -- and in a manner invisible to the user. When a network has a surge in demand, intuitive architecture triggers other resources into action, including idle servers, applications and pools of network storage. Companies pay only for the amount of time they use the services.
With virtual servers, customers are able to deploy single or multiple applications, including networking service and storage, without having to manage their own systems or over-invest in unused resources.
This latest virtual concept works much like IBM's traditional outsourcing setup, in which customers pay IBM to manage their data at a remote location. However, in a virtual environment, there are no customer-dedicated servers, said Mike Riegel, manager of IBM's e-business hosting services.
In a virtual environment, the workload runs on a shared server, which can vary depending on the current utilization, which IBM manages. "That's what gives customers the cost savings," he said.
Customers determine what mixture of platform they want to work on.
Paul Mercurio, senior vice president and chief information officer at Mobil Travel Guide of Park Ridge, Ill., outsources through IBM's virtual services the operation of its Web-based travel support program, MobilCompanion. The Web site runs on the mainframe platform.
"This entire business runs virtually," Mercurio said.
A traditional outsourcing model was considered from the beginning, but Mobil Guide was sold on the virtual option.
"We had to create this [Web site] from scratch," he said. "We had the option of spending millions on computers, database administrators, high titles, big salaries -- or we could outsource it. The flexibility of the model and the economics made it a clear choice for us."
Mercurio said his company has saved money in two ways: There was no up-front capital expense, and they're able to ramp up and ramp down as needed. He estimates that the virtual model is 25% to 30% less expensive than a similarly configured system operated in-house.
"We have twice as much traffic in July as we do in February," he said. "With the virtual model, we're able to match the model [of traditional outsourcing] and better meet our needs."
Customers are charged a one-time setup fee, followed by variable monthly recurring charges for the computing capacity consumed. According to Riegel, customers project how much capacity they'll use, but IBM will guarantee a 20% increase in unplanned usage. However, regardless of whether customers use more or less than the estimated amount, they pay only for what they use.
Virtual server solutions are deployed from an IBM service delivery center in Boulder, Colo. Additional locations will be used in the future.
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