Smaller companies could benefit from Hewlett-Packard's Utility Data Centre offering in the new year. The company also strongly hinted that the next version of UDC would support virtualisation of local disks.

This may sound like a small step for IT manager-kind, but in fact it should make UDC more affordable for smaller companies, since it allows them to adopt it without having to buy a large storage array. The company also defended its strategy of largely in-house developed products, instead of acquiring software for on-demand computing, as IBM and Sun are doing.

No plans are available for UDC version 2.0, due early in 2004, but support for local storage would “lower the barrier” for smaller customers who do not need the full XP storage array currently required, said Peter Hindle, UK business manager for HP’s enterprise systems group. Another much-requested feature that should arrive in version 2.0 would be support for management of applications across virtualised resources, instead of just managing the resources themselves, he said.

New features in next year’s UDC will be developed by HP itself, since TerraSpring, the basis of UDC, has been acquired by Sun Microsystems and HP has so far not bought any other key partners for on-demand computing. HP will be able to keep up by innovating on the version of TerraSpring’s source code that it owns, said HP spokesmen.

“We can do better than Sun,” said Bernard Tomlin, practice principal at HP Services, UK. “We are the number one systems management supplier.” Although HP recently bought web services management company Talking Blocks, its approach is noticeably less acquisition-based than its main rivals in on-demand computing. Sun’s spree has included TerraSpring, CenterRun and Pirus Networks; and IBM has acquired, developed and re-released the Think Control product.

Analysts feel the approach might work, but would like to see HP owning more. “HP also works with Opsware and Altiris, neither of which they own,” said analyst James Governor of Redmonk. “But it is good to see them buying Talking Blocks. HP needs to own more of what it sells.”

HP’s UK labs contains a large and presumably realistic implementation of UDC, which shows the basic concept – of a virtual data centre that can be rewired at will. The physical wiring of the hardware, including 150 servers, three tiers of Cisco networking kit and HP storage arrays, has not been touched for a year, said Dave Coles, central infrastructure manager for HP Labs in Bristol, despite many changes in the allocation of resources.