FutureLink: Software set to become an utility
The utility model is useful in many areas of your life. We don’t have to drill wells or store our water. We just turn on the faucet.
Gas, electricity and cable are all available to us at our homes and businesses. Software can be a utility, but is it right for software?
Cameron Chell Calgary believes so. FutureLink Distribution Corp., a Calgary-based startup, has Chell as its president. They are targeting businesses with between 10 to 1,000 employees with their new Computer Utility Service.
FutureLink plans to become the central outsourcing provider for computing services and support. FutureLink would manage all applications from a central server location. FutureLink customers would be able to use legacy or thin-client PCs to connect to FutureLink servers. Monthly bills would be issued on a per-seat, depending on what applications were used.
Chell said that thin clients have the ability to swap out for problems at the end user. “We aim to provide a service which is as reliable in the phone arena as it is in the internet.”
Chell is quick and proud to point out figures from Forrester Research Inc. which state that the US$21Billion application services provision industry by 2001.
At a Calgary press event, he declared that “this is the fifth stage of computing.” He stated that the first four waves were mainframe computers, minicomputers (PCs), and network computing.
The company officially launched its $3million server farm. This includes nine Compaq3000R dual Pentium 450MHz machines as well as 23 Compaq1850 systems at 450MHz. These machines will be supported by 250GB worth of hard drives, 35 70GB tape drives, 19GB RAM, and a quad array with 35 70GB tape drivers. Citrix Systems Inc.’s middleware enables Windows applications to run from the server.
Initial capacity will be 350 concurrent users. It is planned to expand to 4,200 concurrent users across North America. According to the company it will increase its capacity as required.
The IBM Corp.’s 155Mbps ATM network connects the machines. Access to the server farm is possible via LAN/WAN connections.
Brad Mooney (FutureLink’s technical support manager) stated that the system has redundancy as well as RAID 5 protection. Full back-ups can be performed every night. A UPS provides backup power and conditioned energy. He explained that the room’s environment controls keep it cool and moist to prevent static electricity. Other notable features include fire resistant walls with a two-hour rating, noise levels alarms, and card access.
Computer Utility Service promises many benefits such as central administration and upgrades; extended hardware life; cost savings through volume licenses; and 24-hour help desk support.
Chad Corneal was the product solutions manager for Great Plains Software Inc. Financial software vendor. FutureLink is able to offer “an economies-of scale type of solution,” which will reduce costs for business users.
Rick Larson (area manager in Calgary, Onyx Software Corp.), a vendor for enterprise relationship management software, said, “This opens up an entire new market, and the smaller side of market where capital outlay wasn’t too large.”
Enerline Restorations Inc., a Calgary-based engineering solutions company, already uses the Computer Utility Service. It connects six terminals to FutureLink servers via xDSL technology. Ron Hozjan, vice president and CFO, explained that the appeal of the service was purely economic.
“It proved to be very cost-effective. The payout is two years. I would probably be updating software and changing computers almost every other year.”
Dave Marshall is the director of Canadian software research at Toronto-based IDC Canada Ltd. He said that this application hosting/rental arrangement “just appeared on our radar screen within the last two or three month.”
It’s basically a return from the service bureau days of the mainframe, he stated. This makes it particularly appealing for small and mid-sized organizations who might not be able or able to pay the software.
Henry Bilodeau was the director of sales for FutureLink. He used the US$9,000/year figure, which is a standard figure from research firms like Gartner Group, to show the annual cost of operating an PC. FutureLink’s costs per seat are estimated at $3,000 per annum. A company may have its own hardware but need to access the typical configuration which includes an office productivity suite as well as an Internet connection and email. This would cost about $250 per seat per monthly. Bilodeau advises customers to lease or buy solid-state Windows Terminals if they are in need of hardware.
Chell states that FutureLink was without revenues in January 1998. It also had six employees. It ended 1998 with $10 million in sales and 130 workers (partially due to the August 1998 acquisition by SysGold Ltd., Calgary-based outsourcer).
FutureLink is also reporting that the company will launch an application portal by Q4. The service would be offered to users who could access various applications via the Internet, and then be charged per use.
Marshall of IDC stated that Marshall’s idea is logical. People want to be able to access a wide range of applications. But, it must be affordable.