IT as the fifth utility

The evolution of IT into a business critical service over the past twenty years has seen its status grow to the level of a company’s electricity, water, gas or telephone service. Indeed, as this technology has developed, so too has the pattern for both using, and paying for it.

The past couple of years have seen a shift away from capital purchase of computing equipment, ‘office in a box’ solutions popular in the late 90s, towards cloud computing services. Reflecting this change, some businesses are purchasing IT much more like a utility; as a ‘metered’ cost dependent on usage and demand, akin to fluctuations in the heating costs between the Summer and Winter months – although others do prefer the structure of a fixed-cost provider.

The potential cost savings of viewing IT, and especially cloud computing, as a utility is an attractive consideration; companies can spend large amounts of money on servers only to run them at around 10-20% of capacity. SMEs in particular rightly look for opportunities to maximise their IT capabilities, while spotting where they can make savings; from preventing over-investment in IT resources, unnecessary hardware and software, to the manpower needed to maintain and constantly upgrade and update equipment.

Nonetheless, as important as ensuring IT is running efficiently and cost-effectively, is making sure that adequate provisions are in place should problems occur. While you may have a plan should the electricity cut out in the office – can the same be said of your IT resources? Considering that so many of today’s start-ups are built on and around digital capabilities, this business continuity issue should be front of mind with owner-managers.

According to Aviva’s bi-annual SME Pulse, published on 9^th February 2011, half of SME owners asked about BC said they had no plan in place and a further 16% believed they didn’t need one. Add this to the figure that a third of participants estimated it would take a week to get back up and running following an event: while this timescale may be fairly realistic if a company is reliant on a hardware controller to manage a network, the figure could be longer, depending on the scale of the incident.

Imagining the financial and reputational impact of just five days downtime for your business brings home how crucial IT is to a company’s performance. In stark comparison, if hosted on the cloud, your company can get on its feet straight away – employees can even log onto the network and work on it from home.

IT is the fifth utility therefore, having become so fundamental to a business’s survival. With the right support it can be as straightforward and reliable as running any other obligatory office service.