Four ways to accurately compute virtualization and cloud costs

compared to traditional computing methods, today , almost all IT industry vendors and analysts have reached the consensus that almost all types of virtualization solutions offer fast, efficient, cost-saving advantages. The IDC system and virtualization software group research analyst LAN Song says that, in particular server virtualization, the return on investment can be achieved quickly in the early stages of VMware migration.

He said:"People have a good feeling about server virtualization, is that it can recoup its investment within 6 months, and you can put 4 or more servers in a physical cabinet, which costs the hardware and, more importantly, desktop virtualization to achieve the above goals, In contrast, cloud and stream applications and other application types are less welcome. ”

James Staten, chief analyst at Forrester, has seen higher-than-expected costs or low returns as the main reason for slowing or impeding the migration of university virtual servers. Some of the additional costs are partly the result of unrealistic expectations and partly because of the lack of full access to the cost and budgetary advantages of new technologies.

A study by Apptio, a system automation manufacturer, shows that the extra costs are also caused by savvy financial people not to refine virtualization and cloud project costs.

According to the study, 64% of IT managers believe that the analysis and detailed tracking of virtualization costs are important, and 20% of IT managers cost analysis and tracking is critical.

However, 48% per cent of respondents said they viewed the costs and benefits of cloud or virtualization projects as a total amount-the cost. 25% of respondents will track costs, but tracking the data is not accurate enough to be used for budgeting or auditing. 20% did not list cloud or virtualization costs separately, while 10% did nothing to track costs.

In addition, 80% of people say more detailed reports will become more important this year. Staten says the most important issue now seems to be that most IT managers don't know how they should evaluate and report on virtualization projects.

They don't solve the problem very well, because few companies will be able to track down the IT spending in some departments by deducting fees, let alone making deductions for cloud or virtualization. Forrester chief analyst and vice chairman Galen Schreck said.

There are also companies that use showback--and deductions that are similar, except that it does not include it, which is a report of the cost of virtualization it usage for each business unit.

To step back, even if the financial analysis is done well, there is a debate about how to define the cost of computing services on the hardware, storage, and network.

Andi Mann and Gerod Carfantan from Apptio have presented four ways to compute virtualization and cloud costs, Andi Mann is a former analyst at the Enterprise Management Association, Gerod Carfantan is the manager of the VMware Program Development Department, His blog on the Vcorneroffice.com website carries out the following analysis of cost and performance:

1, dynamic Cost accounting: This is based on the basic requirements of consumer costs, in dynamic costing all the IT costs will be based on transaction volume, service times, the number of users and other it work to assess the consumption of basic indicators to divide.

This dynamic cost accounting approach works and can also be used to count unused resources if analysis and tracking can be straightforward in virtualized environments.

The cost per minute of an external service provider is exciting, but only possible, because other users will pay for it when you are not using the service.

2, tiered pricing: branch offices do not require mass storage, high bandwidth and additional support. This approach solves most business support issues, and enables you to deploy and manage servers and other tasks.

3. Ratio of service cost to infrastructure cost: one way to count unused resources is to categorize baseline costs, such as application, network access, or other application WAN bandwidth or data center site facilities that provide services to business units. The benchmark cost of the business unit may remain relatively stable, but the cost of the service will be different for consumption.

The density of virtual servers-the cost of all infrastructure affects the operation of the virtual infrastructure-licenses, servers, storage, bandwidth, IT personnel, venues, add-ons, and so on-can be aggregated and partitioned according to the number of virtual servers required by the business.

In addition, the cost can also be divided according to the application needs, all of the same elements are pooled together, as if merged into the virtual server density statistics, but in this case the cost to be based on the specific application of the resource utilization of the division. The cost of a business unit is determined by whether it is individually tailored to the application, or by its proportion in other business units.

4. Evaluation: direct or indirect assessment is the cost distinction of external accounting for the needs of certain special business units. This includes counting the IT costs for the business unit based on the company's entire operating budget.

What kind of method is right for you? Staten said that different companies should be flexible in terms of their actual needs.