From the beginning of mainframe and servers in earlier days, these are designed to handle complex computation for a bunch of applications in house. Then, with the Moore’s Law, the computational capabilities have advanced rapidly, enabling a layer of masking that allow simultaneous computing in a single hardware. This eventually evolved to be a virtualization layer that allows multiple virtual machines sitting on a cluster of hardware. From there on, Software Defined Datacenter (SDDC) is born. SDDC maximizes the hardware infrastructure by virtualizing as many IT Infrastructure as possible, making it non dependant on the already powerful hardware components (such as multi-cores processors, fast network and flash drives).

The virtualization concept continues to evolve and combining the popular behaviour of consumer’s self-service capabilities (such as Apple’s AppStore and Google’s PlayStore), the users of these infrastructure naturally asking these capabilities to be presented as a service. McKinsey recently stated that ‘as-a-Service Consumption’ for everything from software to hardware become the top ten trends redefining enterprise IT Infrastructure. The world famous consulting firm also states that the enterprises now prefer consumption-based pricing models, all the way from hardware, software to micro-services.

Imagine this; instead of paying for ticket for a comedy show, you just pay per laugh at the end of the show. If the comedian is doing a heck of good job, should you be paying more for such quality and vice versa? This is similar to consumption-based pricing model where you are paying for specific resources such as virtualized processing power (per vCore unit) or even virtual storage (per vStorage GB). It is also metered against the period of usage of these resources. All these are not new to us as we have been using such concept so common daily in our lives. This includes from paying for weapons in a RPG game to paying our electricity bill. We also commonly refer this to mobile postpaid model for baseline based consumption model. For the given internet data size, you are to pay a fix amount monthly and any usage beyond the agreed package, you will pay as you use.

Now, you have the virtualization capabilities on one hand and on another you have consumption based-pricing. If you add these two together, you will get number 1 factor why

Cloud Computing is so popular. This is echoed by McKinsey as well where the trend of utilizing public clouds has gone mainstream. From 2015 through 2016, revenues for infrastructure as a service (IaaS) and platform as a service (PaaS) rose by 53 percent, making them the highest-growth segments in cloud and infrastructure services. Thus, IT infrastructure has transform itself into a service based offering and cloud just simply reinforce this statement. Application developers, business units and even IT team themselves has get more comfortable in asking vendors to provide IT as a Service in consumption based model. This will continue to be the trend in digital transformation era.