What price utility computing for the Web 2.0 era?

When Sun launched its pay-as-you-go Grid service in March, it could have done with having Amazon's new EC2 compute-on-demand service to fall back on. Sun Grid's demo application fell prey to an unexpected surge in demand on the day of its launch. Sun blamed a co-ordinated denial-of-service attack, but I've always thought that was just a convenient excuse.

The new EC2 service from Amazon Web Services is designed to protect startups from just the kind of spike in demand that brought down the Sun Grid demo app. As EC2 director Peter Desantis told ZDNet's Dan Farber earlier today:

"The service is designed for real-time Web applications, providing the ability to rapidly provision large amounts of compute capacity, configuring it and paying for it as you need it."

That emphasis on 'real-time Web applications'Unlike Sun, IBM and HP, Amazon is in tune with the on-demand ethos of Web 2.0 highlights the distinction from Sun's more complex Grid approach. Forget all those consultant-laden grid interfaces. EC2 provides a simple web service API that allows you to provision servers from Amazon's server farm whenever your Web application get hits with the hockey-stick of sudden blogospheric notoriety. Or you can use it to stress-test your application before it melts in the limelight of sudden popularity.

Earlier this month I highlighted Amazon Web Services' aggressive pricing policies. EC2 is no different, undercutting Sun's $1-per-minute-hour price by a whopping 90 percent margin to 10c-per-hour. Amazon will have done its sums, and will still plan to make a healthy profit on that price; but depending on usage patterns, there may be some changes when the beta ends.

All the same, it gets us closer to that "industry standard definition of CPU per hour usage" that Dan Farber highlighted as needed before utility computing becomes as real as utility power or water. At the beginning of the year, I quoted Dan and also ComputerWorld's Mark Hall on this topic:

"For utility computing to fulfill its promise, there has to be a standard pricing model that all users can apply to their operations. Until then, on-demand computing will be just another complex, proprietary pricing strategy vendors use to keep you from fairly and accurately comparing one service to another."

Unlike the old-school vendors including Sun, IBM and HP, Amazon Web Services is in tune with the on-demand ethos of Web 2.0. EC2 brings us several steps closer to fulfilling that promise with a standard pricing model than Sun Grid ever did. It reinforces my conviction, aired in earlier postings, that Amazon.com is well placed to become IT utility to the enterprise, while Sun's utility vision is flawed.