Vinnie, The Deal Architect, has an interesting early review of The Big Switch the latest book from of Nick "IT Doesn't Matter" Carr. The book sounds like an interesting read and I just ordered a copy from Amazon.
Vinnie has a great take on how the reality of utility computing just doesn't match up with the dream the pundits are selling.
My comment on his blog sums up my $0.02 on the matter:
But I would add to your analysis that the root problem isn't scale. The problem is that the business visions have jumped light years ahead of their internal capability to "deliver". Simply put, the technical tooling and technical processes are woefully inadequate. Poke around in how the large outsourcers, managed services providers, or even large e-commerce and SaaS providers manage their infrastructure and applications and I think you'll be shocked at how manual and ad-hoc things really are.
A good metaphor to use is manufacturing. The business minds behind the utility computing push are talking about things that are the equivalent to "mass customization" and "just in time delivery" while the technology and process model available to deliver those dreams is little more than the master craftsman and apprentice model of the pre-Ford Motors days (or maybe an early Ford assembly line, to be fair).
There are some interesting things under the radar in the open source community like ControlTier (plug) and Puppet, but the general interest in the problem space seems to be limited to the relatively limited pool of engineers who have tried to scale significant operations and know that a better way is out there. Unfortunately most of the technical fanfare in this area seems to be focused around "sexier" things like faster grid fabrics and hardware vendor wars. In general, automating and optimizing technical operations is a neglected field.
And for the time being, forget about help from the big 4 systems management vendors. Their state of the art is not much more than 15 year old Desktop/LAN management technology wrapped with a new marketing veneer.
So this is a problem that isn't going away soon and is a real impediment to all who don't have high profit margins or large pools of cheap labor to throw at the problem.