Here are what a couple of sources say about “utility”:

Investopedia.com's definition of Utility

Textbook Definition

1. An economic term referring to the total satisfaction received from consuming a good or service.
2. A company that generates, transmits and/or distributes electricity, water and/or gas from facilities that it owns and/or operates.

Investor's Definition
1. A consumer's utility is hard to measure. However, we can determine it indirectly with consumer behavior theories, which assume that consumers will strive to maximize their utility. Utility is a concept that was introduced by Daniel Bernoulli. He believed that for the usual person, utility increased with wealth but at a decreasing rate.

Hushon's sidebar: actually Daniel Bernoulli is looked at as having provided some key risk management approaches still used in game theory today.

2. Since consumer demand for utilities does not change dramatically with a change in price, these companies are regulated by the state or provincial and federal governments.

So, you may ask, what does this mean to me, we'll let's just say that utility is a measure of the value that a given good yields upon consumption, sounds fuzzy - “I'll know it's valuable when I see it” kinda thing, but it's really moving back to a definition that reads something like “worth more than it costs”.

The only problem is the fact that most of our traditional utilities are regulated, whereas we look at commercial software and hardware vendors as an open capital system. Okay, but, isn't the open source / community source movement actually something of a regulatory movement? Is the term “commodity provider” actually one that denotes a high degree of standardization that resembles a regulated system - much like Bernoulli actually said that “people do not maximize expected returns, but expected utility”? Either way, I think that we all agree that IT's “utility” or “value add” will be hard to measure, and even harder as we WORK to actually standardize as much of our compute plant as possible.

I, personally, look at activities like ITIL as being very similar to what we are trying to achieve on the IT front, and what is most interesting is that movement of ITIL toward standard pattern based approaches to process architecture, much the same way that we are discussing pattern based approaches to service and system architecture. Also interesting is the fact that ITIL has been strongly embraced by both the technical staff ala. systems administrators to provide them a more consistent approach to building out and managing technology based systems, as well as by the business staff, for whom the vocabulary, standard definitions, and sequences provide a language through which the two often distinct camps can effectively collaborate. I elaborate a bit on these issues in this two part series 1 and 2.

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The Graduate, 1967

“Mr. McGuire: There's a great future in plastics. Think about it. Will you think about it?
Ben: Yes I will.”

Now that I have introduced the terms (Grid and Utility) that I will attempt to use consistently; I would like to elaborate some of strategy for Sun's approach to Utility Computing. Namely, Sun Grid is a family of utility oriented offerings that enable consumption based charging with multi-tenant economics, on top of an infrastructure that uses automation instead of people to reduce operating expense.

It should be obvious to anyone who has read Greg P, or Jonathan's Blogs that Sun is a) pretty serious about utility and b) that we feel strongly that this approach to utility services offers some very exciting possibilities wrt. emerging new business models.

1. services augmented by utility delivery
2. services built for utility delivery
3. services made affordable, scalable, trustable through utility delivery

Overall, for the smaller developers, the underdogs, the use of utility scale with as-you-use-it pricing is a great leveling factor. In the world of Online Gaming, for example, how does a small “in our garage” shop possibly compete against the resources of Electronic Arts? Simple, build using open/community source codebases, leverage a ubiquitous client-side language like Java, and then target a expense oriented vs. capital oriented deployment scenario where commitments to acquire resources (incurring of expense) are aligned in a very fine grained way with the generation of revenue... in affect creating a near 0 capital investment model, while matching revenue to expense in a cash flow positive way.

The business models are quite exciting, and I'm very interested in your comments here.

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