By llaszews on Mar 19, 2012
Been getting asked again by customers and partners about chargeback and showback in the cloud so thought I would blog on my response to this question. Charge Back background, information and industry analysis: Cloud computing is all about shared resources. These shared resources are computer servers (including memory and CPU), network devices, hard disk storage, database servers, application servers, cooling, floor space, electricity and more. These resources are shared by departments within a company, or by a number of companies, when resources are hosted in the public or hybrid cloud. Currently, hosting providers that run other companies on their cloud platforms do not have an accurate way to measure the shared computing resources used by a specific user let alone used by a specific customer. Additionally, companies running their own cloud data centers, for private or hybrid clouds, have no way of measure and charging back the departments in the company that are using these shared cloud resources. In both cases, the lack of determine shared resource costs and to charge them back to the company, department or user that is using this resources is limited a clear measure of business benefit and impacting company’s ability to measure the Return on Investment (ROI). An IT chargeback system is an accounting strategy that applies the costs of IT services, hardware or software to the business unit in which they are used. This system contrasts with traditional IT accounting models in which a centralized department bears all of the IT costs in an organization and those costs are treated simply as corporate overhead. Showback involves showing the IT costs to a department or customer but not actually charging them for their IT usage. Showback is a gradual method of introducing chargeback into an enterprise. Most companies implement a show back mechanism before a full chargeback system is put in place. Oracle chargeback product: Oracle Enterprise Manager provides tools for defining detailed Chargeback plans spanning different metrics collected for each type of resources as well as defining Cost Centers for grouping costs across multiple developers. Chargeback plans can use not only usage based costs, but also configuration based costs (e.g. version of the platform) or fixed costs (e.g. flat-rate management fee). Chargeback has rich out of the box reports. Trending reports show how charge and resource consumption varies over time, while Summary reports show the breakdown of charges or usage by different dimensions such as Cost Center or Target Type. These reports help consumers in understanding how their charges relate to their consumption and also assist the IT department with budgeting and planning activities. With BI Publisher, the reports can be made available in a variety of formats such as PDF, HTML, Word, Excel or PowerPoint.