Once in a while something comes up that really startles you and makes you rethink some of your basic tenets of how you do things. One of those things is Utility computing. Also known as Grid computing and Elastic computing.

The general principle in telecoms is to overbuild and over specify their networks. Yes, lets expend way more money and time than we need to just in case something exceptional might happen. A lot of Telco networks are usually running at a utilization rate of about 20 — 60 percent with normal traffic erring at the mid part of that scale. Yep. A lot of that money sits there deprecating away and heating the atmosphere. And guess what? Yes - you get billed for it.

A week or so before Christmas some of the bright sparks on the organizing committee for the Emerging Telephony 2007 conference successfully tried out an experiment. They wanted to see if they could build a virtual, scalable, voip infrastructure without touching any hardware boxes. Yes you heard me right. A voip network in the computing cloud. Kevin Lenzo and Tony Minnesale managed to successfully get an image of free switch to run on the Amazon EC 2 platform as an experiment. Completely independently a week or so later I was chatting to one of our Etel sponsors, who let slip that they had been working on exactly that idea as well, using their communications application server with some bigger and very prominent partners. They weren’t experimenting they were working on it to become a product. Not only will they be able to run their app server for basic telco services off of EC2 but they also have telephony web services that they will be able to run there as well mashing up their services with the other services of Amazon like S3. This should allow any third party to be able to not only run basic telephony service but also be able to mashup applications on the fly. I’m not going to mention the partners for now in case I get shouted at but the company that is working on this insanely cool technology is LignUp whose team will be teaching others how to use Utility computing in telephony deployments in their workshop and plenary slot at Etel this year.

For a long time now people have been talking about grid computing and how it will enable something called utility computing to occur. We will be able to buy computing as we can buy say natural gas and pay for only what we use. The problem unfortunately was that it was a lot of hot gas for a long time with very little to be seen. So I was thrilled when Amazon launched their EC2 (Elastic Computing 2) initiative making what is ostensibly utility computing available to anyone to try out and play with. People created images and launched their own virtual servers. It is exactly this experimentation that creates successful new species of technology applications some of which will flourish and grow wildly.

More importantly what utility computing more generally will permit is much more agile working practices for business ]great and small. Small startups and entrepreneurs will be able to realize their ideas and can be assured that they can scale up and down as needed, paying for only what they need. Its ludicrous having to worry about having redundant capacity just in case they get slash dotted. Similarly the larger corporations will be able to pursue more agile practices in their corporate deployments by removing the need to justify large capital expenditures (time and money) for computation infrastructure that can now be bought on demand. Going back to the second paragraph it may be prudent for telco networks to offer on demand wholesaling of their spare capacity to offset their fixed costs. Perhaps not.

The next 12 months will be interesting. I think we can safely expect to see a rise in the number of successful applications of elastic computing/utility computing as hackers can now play with the platform and see what the parameters are. Their cost? A few dollars and a few hours of time. It will be interesting to see in which unexpected areas utility computing makes a big impact and in which areas it doesn’t. If some cool hacks using utility computing has appeared on your radar please share them below or email them to Etel.

(P.S And as soon as I can mention the partners for Lignup, I will do. Its validation all round.)