Utility computing is one of several IT strategies for reducing costs; grid computing, distributed computing, software as a service( SaaS), and cloud computing are others. Utility computing represents an evolution of grid computing.
Utility computing, which dates back to the 1990s, involves consumption-based billing for IT services. Here, the service provider bills for the IT services provided to a customer depending on the service provided. This can involve the leasing of storage space or computing power, application-dependent calculations, the provision of security-related services or data duplication.
Like cloud computing, utility computing offers various IT services such as scaling of computing power, server virtualization in which an application is always assigned a free or less busy server, optimal quality-of-service agreements in which the costs and the quality of service are defined, and, above all, usage-oriented and transparent costs that can be allocated to the individual areas.