Sun’s Network.com utility computing service reminds me of Canary Wharf when it was first built: a huge, mostly empty infrastructure lacking the one thing it was specifically built to accommodate – paying customers.

Canary Wharf is now a thriving business centre, and Sun appears confident that there will be a rush for IT processing resources similar to the scrabble for East London floor space. But are its expectations realistic?

The main problem with utility computing seems to be identifying the target market. In the US, where Network.com has been available for some time, interest in the service appears to be strongest in that most financially prudent of sectors – the small to medium-sized business (SMB) market. Small software development shops looking to compile big programs without tying up local hardware resources appear to be those most tempted by the lure of instantly available, ad-hoc processing resources.

Making money out of SMBs is not impossible, but given the slim margins involved it requires selling in much larger volumes than Sun is currently achieving.

Take SMBs out of the equation, and the list of potential users comes down to big firms doing compute-intensive number crunching or data analysis. Unfortunately for Sun, these firms can normally afford their own high-performance computing resources and have little need to lease somebody else’s by the hour.

The situation looks even bleaker when you consider what Intel, Sun’s arch-rival, is planning for its x86-based computer architecture. The processor giant is confidently expecting to deliver teraflop processing power on servers within a few years, and even desktop PCs shortly after.

Faced with the prospect of such high-performance, low-cost computing power on every corporate user’s desktop, Sun’s business model looks decidedly shaky.

Why pay to lease processing resources on Sun servers when you can run the same high-performance application on your PC overnight or even as a background task while you check your email and work on an Office document?

OK, this is simplifying things to a certain extent, not least because it fails to take into account software developers’ unremitting drive to build applications that squeeze every last drop of performance out of available hardware.

Surprising things that buck established trends can happen in IT, but disappointing customer numbers do suggest that Sun is flogging a dead utility computing horse.