Common utilities like electricity, water and telephone services are comparable to utility computing. In fact, the term utility has been used to describe this particular service in order to show similarities with other consumer-based utilities.
Utility computing works on per use and per demand basis. Customers will pay the service providers only if they use the computing utility. Service providers literally rents out their computing and data storage services and charges users based on the length or duration of the use. This is also known as metered computing or metered computing services.
Utility computing can cut data computing expenses of companies. It is a step ahead of fixed payment for other on demand services. Because companies pay only the service providers whenever the need arises, they can easily control their computing expenses. On lean days, companies may opt out from the service only utilizing it when there is a surge in computing demands. Companies can also save a lot because it would be unnecessary for them to invest in purchasing lots of computer console, server main frames, software, and of course, personnel to run the system. L a company has to do is to activate the account with a service provider and outsource their computing tasks.
On demand services like utility computing is becoming a popular service for most consumers. Other applications using pay per use principle has been applied to other online services such as pay per view, video on demand, pay per download, web access, and Internet hosting
Utility computing is a very innovative service. This kind of business model enhances the maximization of limited company resources for a very low related cost in investment and overhead expenses.