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Identifying network connectivity as the key issue in realising the potential of virtualisation, he sees this as playing to the strengths of a telecomms provider. In other words, in a converging world where voice data is digital and can be delivered alongside a myriad of other services - there must be more to life than just being a broadband supplier. Instead of facing constantly eroding margins, 'take over' the services that are required, within which broadband connectivity is merely the transport layer.

There are three elements to this approach, he highlighted. First, add virtualisation to the resource layer, so that networking, processing, storage, hardware and software can be access flexibly. Second, abstract the facilities offered by the resource layer, using a SOA (services oriented architecture) to leverage the resources into services. And third, integrate service capabilities to provide value-added products to customers, for example include management capabilities into the mix.

Think of it as a pyramid, with a broad range of available resources at the base, surmounted by a layer of virtualisation to flexibly divide those resources, atop this layer sits the SOA that maximises the possibilities offered by virtualisation, and, finally, atop the pyramid is the goal of business oriented architectures. In other words, all technology being driven towards core business requirements.

BT will, he asserted, be offering 'SLA (service level agreement) type' offerings within nine months, and is aiming to provide 300 virtualised service applications within a year. It is a world of VSUs ((VPN (virtual private network) Service Units), which would be running at 10 per cent load, with the rest available for customer use 'on-demand', as IBM has coined the phrase.

The VPG (virtual private grid) platforms will apparently be based on GridXPert and Synergy technology - BT working with United Devices, for the scalability it can support.

The ideal vision for BT, he suggested, would be for software developers to browse a catalogue of available services or assets in the virtualisation pool and be able to draw them in to their own application.

Underpinning these developments, of course, is BT's 21st Century Network, with phone calls, broadband and other Ethernet services being delivered over a next-gen telecommunications network. With voice services becoming digital, computing power is needed to drive communications along data pipes, and Cardiff has been the first test bed for delivering a new range of services. These include BT Fusion, a mobile phone that uses Bluetooth and IP technology to automatically connect to a landline when used at home, and BT LiveTime, which enables the broadcast of TV and digital radio to mobile handsets.

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(Last week BT trumpeted another £12m investment in the network

At the heart of this grid/SOA vision is the idea of outsourcing, or contracting-out. By devolving non-core business issues to third-parties, business should be able to more flexibly manage their core concerns. The holy grail - as always, as in the previous days of ORBs (object request brokers) and CORBA (common ORB architecture) - is to more closely align technology with real business issues and concerns, rather than the cart driving the horse, as it were. For example, for a financial services institution, instead of concentrating on in-house IT management issues the data can be crunched externally, and potentially more responsively.

In terms of illustrating access to the pool of virtualised resources, he accepted that the 'BT domain' would co-exist and overlap with the 'customer domain' and 'partner domains'. In other words, BT is obviously not going to control all the resources and provide all the services, but the intent is clear - virtual private grids offer a way for BT to evolve from being just a network provider. To take a possible real world example, entertainment services - whether music or video downloads - are clearly going to drive demand for broadband, and BT will want to become more involved in the services provided rather than just relay them.

A big problem for virtualising services, yet to be fully addressed, is the question of licensing. How can you adequately charge for software on ad-hoc basis, when per-cpu licensing is no longer valid. Long term, Falcon pointed out, licensing should not be an issue when you fully devolve a task to the 'pool'. Essentially, you pay for the service, and the service provider has to account internally for any incurred costs - BT for example, would have to take care of any licensing issues with Microsoft, Oracle, or any-other third-party.

Frank Falcon was talking at the Grid Computing Now! seminar in London. This focused on the marriage of grid computing, as the underlying technological infrastructure, with service oriented architectures (SOA), providing the overlaying, adaptive application infrastructure.

As well as a discussion of Standard Life's adoption of an IBM-based approach, and the financial services provider Cattles' Oracle-based implementation of a services oriented architecture, the 451 Group presented the latest stats on the market adoption of grid computing, based on specific vendor deployments (IBM, Sun, HP, Oracle etc, etc). Reporting that 75 per cent of major investment banks are already using grid computing in some capacity (however varying in degree), they detected a clear lead in interest among Financial institutions (31 per cent), followed by the Life Sciences sector, then Manufacturing (18 per cent) and even Government institutions (10 per cent).

The Grid Computing Now! event was hosted by IECnet. This is a not-for-profit collaboration between the National e-Science Centre, which works out of Edinburgh University, and Intellect, which is the trade association for the IT, telecommunications and electronics industries in the UK.

With £1 million of DTI funding, the IECnet was set up in August 2005 to promote the growth of grid-computing - DTI boosts bid for UK grid computing.