Companies like Microsoft laid the foundation of today's computing infrastructure by providing software on desktops and servers that performs an important role but that is, ultimately, easy to overlook and boring to the outside observer. It's only when this software is not around that it becomes interesting because you miss it, like power or the phone going down.
Take Office. Word, Excel, PowerPoint and Outlook automated what humans did with paper, pen and the telephone. Most users employ Office literally for the basics – to write word documents, make spreadsheets, and send emails - that's why upgrades are so slow. Office is a functioning utility. It also runs on 90 per cent of the world's PCs, meaning it's achieved the level of presence demanded to be considered a genuine utility.
Middleware can also be considered a utility. It covers a set of products that – like electricity and the phone line – are invisible to the end-user but keep things ticking and are missed when they are gone. Middleware sits in the infrastructure layer of large organisations' IT performing important - but mundane and repeatable - processes like serving up data, forwarding traffic, and policing user access.
Despite their status as utilities, Office and middleware are not charged as utilities or treated as commodities. Microsoft will charge $400 per copy of Office 2007 – a price many consider expensive and will ensure a good percentage of users do not switch over, overnight.
On middleware, Oracle's enterprise database, for example, kicks in at $40,000 per CPU. Middleware rival BEA Systems charges $10,000 per CPU for WebLogic Server, despite the consensus that the application server is the weakest of all middleware's submarkets. Microsoft, Oracle, BEA and others spent decades developing and building these software infrastructures, so – clearly – feel they have the right to charge accordingly. Often this is justified in terms of returning value to their shareholders. Like the bad old days of telecoms, too, switching is difficult: businesses can't easily change middleware supplier because of vendor lock in and the enormity of the change process.
What we are seeing now, though, with Linux and SaaS vendors is a challenge to the status quo. Companies are either capitalising on the underlying infrastructure or offering a more open infrastructure that is relatively easy to change and is more affordable. They are commodity companies. And that's why the utility providers like Microsoft and Oracle are falling back on old tricks and vendor politics to maintain their monopoly.
The computer industry has been toying with ideas of utility and commodity for a while. Last decade, Unified Modelling Language and Common Object Request Broker (CORBA) from the Object Management Group (OMG) were the vision for utility and commodificaiton in software. Both promised to revolutionise the way software was built and delivered by introducing a standardised language for building software and enabling the re-use of software components - as if they were pieces of a machine. In other words: software as utility, interchangeable and – ultimately priced – as a commodity.
Their downfall was technological and political. Despite the promises, UML and CORBA were too complex for the mass market, meaning they could not achieve the ubiquity of utilities.