Utility computing is a model in which computing resources are provided to the customer based on specific demand. The service provider charges exactly for the services provided, instead of a flat rate.

The foundational concept is that users or businesses pay the providers of utility computing for the amenities used – such as computing capabilities, storage space and applications services. The customer is thus, absolved from the responsibility of maintenance and management of the hardware. Consequently, the financial layout is minimal for the organization.

Utility computing helps eliminate data redundancy, as huge volumes of data are distributed across multiple servers or backend systems. The client however, can access the data anytime and from anywhere.