Utility computing is the packaging of computing resources, such as computation and storage, as a metered service similar to a traditional public utility (such as electricity, water, natural gas, or telephone network). This system has the advantage of a low or no initial cost to acquire hardware; instead, computational resources are essentially rented. Customers with very large computations or a sudden peak in demand can also avoid the delays that would result from physically acquiring and assembling a large number of computers.

Conventional Internet hosting services have the capability to quickly arrange for the rental of individual servers, for example to provision a bank of web servers to accommodate a sudden surge in traffic to a web site.

"Utility computing" has usually envisioned some form of virtualization so that the amount of storage or computing power available is considerably larger than that of a single time-sharing computer. Multiple servers are used on the "back end" to make this possible. These might be a dedicated computer cluster specifically built for the purpose of being rented out, or even an under-utilized supercomputer. The technique of running a single calculation on multiple computers is known as distributed computing.

The term "grid computing" is often used to describe a particular form of distributed computing, where the supporting nodes are geographically distributed or cross administrative domains. To provide utility computing services, a company can "bundle" the resources of members of the public for sale, who might be paid with a portion of the revenue from clients.

One model, common among volunteer computing applications, is for a central server to dispense tasks to participating nodes, on the behest of approved end-users (in the commercial case, the paying customers). Another model, sometimes called the virtual organization,Fact: date=June 2007 is more decentralized, with organizations buying and selling computing resources as needed or as they go idle.

The definition of "utility computing" is sometimes extended to specialized tasks, such as web services.

History

Advert: date=December 2007 Utility computing is not a new concept, but rather has quite a long history. Among the earliest references is:

IBM and other mainframe providers conducted this kind of business in the following two decades, often referred to as time-sharing, offering computing power and database storage to banks and other large organizations from their world wide data centers. To facilitate this business model, mainframe operating systems evolved to include process control facilities, security, and user metering. The advent of mini computers changed this business model, by making computers affordable to almost all companies. As Intel and AMD increased the power of PC architecture servers with each new generation of processor, data centers became filled with thousands of servers.