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The folks who dream up terms for computer functions don't have a lot of imagination sometimes. If you thought hard enough about the term utility computing, you could probably work out what it means. Utility computing is a form of computer service whereby the company providing the service charges you for how much you use it. Think of the electric company or the water company, and you'll have it.
Under this scenario, you as the consumer pay for the resources that you consume, not the resources that the utility computing provider has to provide for you to use them. In other words, you don't pay for the hardware. Depending on how much you use computing services in a given time period, this can present either a savings or a loss.
Sun was the first to offer utility computing, in 2000. Hewlett-Packard followed a year later. Other big players, including IBM, have jumped on the utility computing bandwagon in subsequent years. With such big market forces behind it, utility computing seems to be a thing of the future.
However, some experts warn that it's not as idyllic as it sounds. Think of the electric company, for instance. Where does your electricity come from? Do you know? Does your electric company have a grid with your name on it, and does that grid emanate only power designated for you? Of course not.
This is one of the dangers of utility computing. Your computing services will be coming from what is essentially a big vat, which services not just you but a host of other customers. This might be fine if all you want is a place to store your data or have it analyzed once a year for sales figures purposes, but if you count on utility computing to deliver your everyday, minute-by-minute needs, you might want to pay closer attention to the integrity of the data and services that you get from that utility computing provider.
Still, if you are a small business owner who, despite your size and employee base, has expansive computing needs, then utility computing might help you keep yourself in business. You might have hardware needs that you can never dream of providing with your limited budget, but be able to afford to "rent" via utility computing. That is the kind of service that Sun, HP, IBM, and others are hoping will be their ticket to yet another market for their services.
I think the best and the first utility computing provider is the IsUtility of Xvand's Technology Corp.