You need grid computing. It could save you millions. It could provide competitive advantage to your business. But to get it, you have to build it yourself. Why? Ask your vendors.

Reader ROI

• How grid computing changes the software-licensing model
• Why trust between vendors and CIOs is essential to grid pricing
• The tools you need to begin your own grid project

Most software gets hungry for more processing power from time to time,but Scott McKay's insurance actuarial application at Genworth Financial eats like a shark - it swallows hardware whole and wants more.

So in 2003, McKay tried something that few CIOs in industries outside of academia or financial services (where the need for massively parallel computing trumps all other considerations) have been willing to take a risk on until now: He adapted his custom application to work on a grid - a vast, fluid pool of processing power that splashes around in a motley assortment of spare memory from PCs and servers throughout his company. McKay's shark never runs out of food on this diet, and he now processes actuarial tables in 20 minutes instead of five hours.

McKay loves grid and the money he saves, but he also knows why most of his CIO colleagues are still feeding their sharks the old-fashioned way: Application software vendors won't let their sharks eat grid. That means CIOs who want to save millions on their infrastructures have to build grid applications themselves - no mean feat. "There are a number of issues to make grid work," says McKay, who is CIO and senior vice president of operations for Genworth Financial.

And the primary issue is (no surprise) money.

Sacred Cash Cow

Grid blows up the traditional software licensing model, which charges customers according to the computer processor that runs the application - in other words, one application, one computer, one price. But with grid, no CPUs are dedicated to a specific application. McKay's grid application draws on a river of power that may flow across as many as 300 of his PCs in a day, but may only spend a few minutes on each. To date, vendors haven't been able - or, say some critics, willing - to figure out how to make their money with grid computing while giving users what they want - virtually unlimited CPU power without astronomical licensing costs.

"The vendors haven't come to grips with how they're going to license their software," says Jonathan Eunice, principal analyst with IT research company Illuminata. "Software licensing remains messy and wholly unsolved."

At this point, vendors are unwilling to relax their traditional per-CPU software licensing models to allow grid to flourish, according to a report from The 451 Group, a research company. "None of the vendors are doing anything material to support changes [to the software licensing model] at this time," says William Fellows, principal analyst at The 451 Group.

The landscape is further cluttered by the conflicting claims that vendors make about their grid offerings in this hot, new market, says Carl Claunch, a vice president at Gartner Research. He says grid computing has been "hijacked by the marketing folks". And even some vendors agree (about other vendors): "What all the vendors have done is to put grid under their umbrellas, [regardless of whether their solutions really qualify]," says Ken King, IBM's vice president of grid computing. "That has created hype around grid, and confusion."

Other barriers to the creation of a solid grid market include a lack of standards and the high cost of reconfiguring standard client/server applications to work on grid.

But despite all these problems, the grid buzz refuses to die, because the potential for saving money, reducing complexity (for CIOs, anyway) and lowering maintenance burdens is far too compelling. McKay says he has slashed his hardware acquisition costs, chucked excess software and provided processing times that beat any of his competitors in the insurance industry.

And when an insurance company can process its decisions faster than competitors, you're not talking IT any more, says McKay, you're talking competitive advantage. "Grid is one of things that differentiates us" as a business, not simply an IT shop, he says proudly.

But vendors won't vote themselves a reduction in revenue anytime soon, says The 451 Group's Fellows, which means more CIOs will be left scratching their heads, wondering, Why not me?