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Cost Calculation: The missing part of your Cloud Strategy

IT have started doing consolidation and platform virtualsation from a while.
A good level of maturity is reached and many IT managers are planned to deploy Cloud layer in order to satisfy the fast growth of customers request and reach a best time to market.

Many excited features and functions are offered by cloud platform like Service Portal, service Catalog, Capacity management, Automation and workflows feature and also a very important module called charge-back module.

IT manger didn't give the same importance to such feature and focus only on the technical part of Cloud platforms.

Consolidation and virtualization have helped companies reducing very well CAPEX and OPEX by improving the percent of hardware utilization and centralize support activities and knowledge.
Reaching a high level of virtualization will reduce a while your investisment regarding infrastructure and hardware part.

IT managers should be very careful in order to not doing the same error as before.
IT was considered as big wast of money for enterprise before starting this wave of consolidation and virtualization. IT managers should control investment and have a detailed status regarding the cost of all infrastructure components from servers, storage, network and hypervisors.

Cost modelling or charge-back is a very important process to be implemented within your cloud environment when you are dealing with virtualization. You should be able to estimate and determinate the exact cost of your Virtual Machine within the different possible configuration: vCore, RAM, Storage.

Let's consider the case of Public Cloud. When you want to buy Virtual machine form Amazon or other cloud service providers, they give you the detailed price for each items.They define type of VM and give you the ability to add extra elements such as disks, Nics.....

I used to use a very good excel sheet published by VMware and that give me a simple way to determinate the cost of my Virtual machine regarding the hall environment.

Please use this VMware link to download the sheet.


You have to do such simulation before configure your Chargeback product.

My first exercise with cost calculation was for our Public Cloud platform for Iaas services. I have used the excel sheet to calculate the VM cost for small, medium and large configuration.

Three principal configuration items characterize each Virtual Machine:
  • Processor Speed (GHz)
  • RAM (GB)
  • Storage (GB)
Don't forget the reservation and over commit percentage for memory and CPU. Fixed Cost is the initial and recurring cost of server, storage and network connectivity.This include also all the products licenses. I think also that this item should include the cost of power and Data Center Facilities which are missing in the VMware Sheet.
Rather focusing on Technical capabilities for your cloud platform. IT managers should give importance to the cost of delivered VMs. IT comes an infrastructure service provider.A good management of SP should know very well the cost of his items to sale well his product.
Also, knowing the cost of your hall platform help you reduce more and more investment by trying to reduce the cost of licenses within the deploy of Open Source hypervisor for example for development uses. Openstack or other opensource framework could be very efficient for test and development environment.
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Comments

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