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This repackaging of computing services became the foundation of the shift to "[[Code on demand|on demand]]" computing, [[software as a service]] and [[cloud computing]] models that further propagated the idea of computing, application and network as a service.
There was some initial skepticism about such a significant shift.<ref>{{citation | publisher=ZD Net | url=
IBM, HP and Microsoft were early leaders in the new field of utility computing, with their business units and researchers working on the architecture, payment and development challenges of the new computing model. Google, Amazon and others started to take the lead in 2008, as they established their own utility services for computing, storage and applications.
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IBM and other mainframe providers conducted this kind of business in the following two decades, often referred to as time-sharing, offering computing power and database storage to banks and other large organizations from their worldwide data centers. To facilitate this business model, mainframe operating systems evolved to include process control facilities, security, and user metering. The advent of mini computers changed this business model, by making computers affordable to almost all companies. As Intel and AMD increased the power of PC architecture servers with each new generation of processor, data centers became filled with thousands of servers.
In the late 1990s utility computing re-surfaced. InsynQ, Inc. launched [on-demand] applications and desktop hosting services in 1997 using HP equipment. In 1998, HP set up the Utility Computing Division in Mountain View,
In spring 2006 3tera announced its AppLogic service and later that summer Amazon launched [[Amazon EC2]] (Elastic Compute Cloud). These services allow the operation of general purpose computing applications. Both are based on [[Xen]] virtualization software and the most commonly used operating system on the virtual computers is Linux, though Windows and Solaris are supported. Common uses include web application, SaaS, image rendering and processing but also general-purpose business applications.
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