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On-demand computing is a business computing model that allows companies to provide access to computing resources as they become necessary, rather than full time. Doing this can save the company money on hardware and software licensing among other things.
A common application of on-demand computing might be found in a hospital environment or in very large organizations. The computers that are used within this type of environment are typically reliant on other computers to provide them most of the resources they need. These "thin clients" can run a rudimentary copy of an operating system and use any other needed resources from a networked location.
Operating in an on-demand computing enterprise model can allow licensing costs to decrease if the applications are configured in a terminal services environment. The licenses are available as needed but in some cases can be kept in a pool to allow all users to pull from the available copies only when the application is used, reducing the total license count. This style of computing can also reduce management overhead for the environment and power consumption for an organization. These are possible because the applications used could be installed into a server farm one time and distributed using on-demand tools, like Citrix or other terminal services applications to present the application to users. This reduces the number of times an installation or deployment takes place.
As for the reduction in energy usage, thin clients consume far less energy than a full featured client and can reduce the footprint of an organization tremendously.
Many large vendors such as HP, Sun Microsystems, Microsoft, and IBM are working to create as many uses and scenarios for their on-demand computing products as possible. As more of these products become available and easily adaptable to an on-demand environment, more and more enterprises could look to on-demand computing to be the way of their future. In the future, even more virtualization could become very mainstream. This technology allows the server footprint of an organization to be greatly reduced by consolidating multiple physical servers into virtual machines that are run on one physical hardware platform, sharing hardware across multiple hosted servers.
Some of the latest technology allows thin clients to boot from the network and load an image of the operating system from the network along with other applications that might be needed by the user.
The on-demand computing enterprise model does not seem to be going away with the release of Microsoft Windows 2008 and Hyper-V the virtualization of servers will likely become even more mainstream and allow many more organizations to benefit from on-demand computing and virtualization.