Affiliated Computer Services (ACS) has struck a deal with Sun Microsystems that will let it pay for hardware and software according to usage instead of paying a fixed price.
By paying Sun for usage, ACS, a provider of IT services such as outsourcing and systems integration, will in turn be able to price its services using the same consumption-based model. Sun calls this “utility computing”, because it resembles the way in which people pay for their water and electricity. ACS will target these services to the world’s largest 1000 companies.
In addition to letting ACS align its IT costs with its usage, the deal will also make it easier for ACS to access the latest Sun technologies.
Giving clients the option to pay for IT products according to usage is becoming increasingly popular. IBM and HP offer similar options to increase and decrease hardware and software capacity on demand, based on fluctuating needs.
The vendors believe clients like this payment model because it prevents them from overpaying for an underused IT product. Likewise, it protects them from finding themselves overwhelmed by a sudden computing demand their systems can’t handle. These pay-per-use arrangements are also attractive because clients don’t have to buy the products and put the capital expenditure on their balance sheets.
This deal is non-exclusive, meaning ACS is free to strike up similar arrangements with other hardware and software vendors, while Sun is free to do the same with other IT services providers.