It's the airline's responsibility to ensure that sufficient capacity is in place to meet demand -- without having excess capacity in place, being wasted because not enough people wanted to fly somewhere at a given time. Airlines use discriminatory pricing (charging different people different prices based on time of purchase, seat location, etc.) to achieve high utilization. Amazon has done something similar via a mix of on-demand, spot pricing, and reserved instances to drive high utilization.

In the context of cloud computing, this means there is a transfer of utilization risk from the application to the cloud provider. It is no longer the responsibility of the app group to figure out just how much capacity is required to support their app at all times, in both demand peaks and valleys. It's the responsibility of the cloud provider (in the case of a private cloud, the responsibility of the operations groups, and, by extension, the CIO) to ensure sufficient capacity is on tap. And, in the case of a private cloud, it will be the responsibility of whoever is responsible to ensure efficient operation (in other words, high utilization levels that allow low pricing). Inefficient operation will manifest as high resource pricing to application groups.

High resource pricing wasn't much of a problem in the past; after all, there was a high degree of quasi-monopoly lock-in for application groups; it wasn't easy for them to move the hosting of their applications to other providers. Today, however, using an external cloud provider is trivially easy, which means that in the future, apps groups will have easy access to alternatives to internal quasi-monopoly resource provision.

How can internal IT groups address this issue of capacity planning and utilization risk? What are the options for resource providers in attempting to ensure demand is met at the moment it's required? Here are some thoughts: