Most applications do not benefit from megaservice economies of scale. Other companies report that they need an administrator per terabyte, an administrator per 100 servers, and an administrator per gigabit of network bandwidth. That would imply an operations staff of more than 2,000 people to operate Google—nearly 10 times the size of the company.

Outsourcing is seen as a way for smaller services to benefit from megaservice effi-ciencies. The outsourcing business evolved from service bureaus through timesharing and is now having a renaissance. The premise is that an outsourcing megaservice can offer routine services much more efficiently than an in-house service. Today, companies routinely outsource applications such as payroll, insurance, Web presence, and e-mail.

Outsourcing has often proved to be a shell game—moving costs from one place to another. Loud Cloud and Exodus trumpeted the benefits of outsourcing. Now Exodus is bankrupt and Loud Cloud is gone. Neither company had a significant competitive advantage over in-house operations. Outsourcing works when it is a service business where computing is central to operating an application and supporting the customer—a high-tech low-touch business. It is difficult to achieve economies of scale unless the application is nearly identical across most companies—like payroll or e-mail. Some companies, notably IBM, Salesforce.com, Oracle.com, and others, are touting outsourcing, on-demand computing, as an innovative way to reduce costs. There are some successes, but many more failures. So far, there are few outsourced megaservices—payroll and e-mail are the exception rather than the rule.

SETI@Home sidesteps operations costs and is not funded by advertising. SETI@Home is a novel kind of outsourcing. It harvests some of the free (unused) computing available in the world. SETI@Home “pays” for computing by providing a screen saver, by appealing to people’s interest in finding extraterrestrial intelligence, and by creating competition among teams that want to demonstrate the performance of their systems. This currency bought 1. 3 million years of computing; it bought 1. 3 thousand years of computing on February 3, 2003. Indeed, some SETI@Home results have been auctioned on eBay. Others are emulating this model for their compute-centric applications (e.g., Protein@Home or ZetaGrid.net).

Grid computing hopes to harvest and share Internet resources. Most computers are idle most of the time, disks are half full on average, and most network links are under-utilized. Like the SETI@Home model, grid computing seeks to harness and share these idle resources by providing an infrastructure that allows idle resources to participate in Internet-scale computations. ²

WEB SERVICES

Microsoft and IBM tout Web services as a new computing model—Internet-scale distributed computing. They observe that the HTTP Internet is designed for people interacting with computers. Traffic on the future Internet will be dominated by computer-to-computer interactions. Building Internet-scale distributed computations requires many things, but at its core it requires a common object model augmented with a naming and security model. Other services can be layered atop these core services. Web services are the evolution of the RPC, DCE, DCOM, CORBA, RMI,… standards of the 1990s. The main innovation is an XML base that facilitates interoperability among implementations.