Proposal for a New Chargeback in ManageIQSergio Ocón (sergio.ocon@redhat.com)A bunch of others that could not make it here todayManageiQ Design Summit June 2016

@sergioocon github:sergio-ocon

Agenda

The problem

Understanding the cost structure

External costs

Consumption intelligence

Priorities

Improvements to rating and billing

The problemAccurately report information about the financial side of the virtualization and

cloud environment

Cost allocation and distribution

For Operational, Tactical and Strategical management

Integrate with other elements in the company:

Data-warehouse / ERP / Billing

Being able to understand economic results of actions:

Costs of changing all infrastructure to the cloud

Renewal of hardware

Generating policies and actions that act on that information

Being able to understand the costs of the infrastructure is key to manage it

Integrating with DWH / ERP / Billing for company-wide management

This is not a financial system

Simplified: no taxes, no legal, no payments

Understanding the costs

Inputs

Reports

Dashboards

AnalysisEXPORT

ERP

Billing

DWH

Differentiating views on costs

Expense: cost to the user

Associated to users and services

“Independent” of costs of service (but related)

Cost: infrastructure and providers

Amount expended to maintain the infrastructure

Associated to providers

External and internal costs

Budget

Intended expenditure, “how much do I have to spend”

Forecast

What should happen to reach the budget

From actual data to budget

Activity Centers

Use | Infrastructure

Use | Infrastructure

Use | InfrastructureInstance

Storage

Network

Container

Service

VAS

Compute

Memory

Performance

CPU

Other

Fixed + variable

Fixed + variable

Fixed + variable

Costs (direct + indirect)

1. Individual elements costs - how much it costs to have it running (i.e. VM, container, LUN, hypervisor, etc)

2. Cost center groupinga. Numbering schemesb. G/L account-type scheme

3. Tenant / Cost groupinga. Understand costs by

group/user/tenant4. KPI

a. Cost/VMb. Cost/Transactionc. Cost/VM/Provider

5. Amortizationa. OPEX/CAPEX

Cos

t dis

tribu

tion

Costs

Activity Centers Modifier

Modifier

Modifier

Costs

Instance

Storage

Network

Container

Service

VAS

Compute

Support level

Licenses

Managed

Other

Fixed + variable

Fixed + variable

Fixed + variable

1. Individual elements costs - how much it costs to have it running (i.e. VM, container, LUN, hypervisor, etc)

2. Cost center groupinga. Numbering schemesb. G/L account-type scheme

3. Tenant / Cost groupinga. Understand costs by

group/user/tenant4. KPI

a. Cost/VMb. Cost/Transactionc. Cost/VM/Provider

5. Amortizationa. OPEX/CAPEX

Cos

t dis

tribu

tion

Costs (direct + indirect)

Activity Centers

Modifier

Modifier

Costs

Instance

Storage

Network

Container

Service

VAS

Compute

Electricity

Personnel

Other

Fixed + variable

Fixed + variable

1. Individual elements costs - how much it costs to have it running (i.e. VM, container, LUN, hypervisor, etc)

2. Cost center groupinga. Numbering schemesb. G/L account-type scheme

3. Tenant / Cost groupinga. Understand costs by

group/user/tenant4. KPI

a. Cost/VMb. Cost/Transactionc. Cost/VM/Provider

5. Amortizationa. OPEX/CAPEX

Cos

t dis

tribu

tion

Costs (direct + indirect)

Activity Centers

Expense

Instance

Storage

Network

Container

Service

VAS

Compute

Other

1. Price per service associated to user / group / tenant

a. Different users can have different prices

b. Service can be a VM or a mix of VM and storage

c. Different options for the same service

2. Dependencies in pricesa. I.e. Service includes 3

GB of storage for freeb. Unlimited VM

3. Reserved or used4. Relatively independent of costs

a. Cost+b. Income-

5. Wholesale + Retail

Service catalogue

Service 1

Service 2

Option A Option B

Service 3 Not allowed

External costsSome costs are external, meaning:

You don’t control them

Their price can vary with time outside of your control

Examples

Public cloud costs

Licensing renewal

Those elements have to be included in the model in an automatic/manual way

Using public API

Time-bounded

Consumption Intelligence

Demand

a. What is the demand

b. How it is structured

Costs

c. What are the costs

d. Structure

KPI★ This are not mockups of the result

Consumption Intelligence

Budget

Define expected demand and budget associated to it

Compare with actual costs

Define strategic plan

12+0

3+9, 6+6, 9+3

0+12

Scenarios and comparative analysisUnderstand what would be the impact of:

Renewing hardware - less hardware needed + OPEX

Moving workloads to the cloud => Change of cost structure

Compare performance of providers

Cost per transaction of changing one or more layer (i.e. HW, storage)

Understanding parameters that get affected (i.e. AWS different performance per VM type)

Plan for OPEX and CAPEX

Development priorities

C & U Time

Database

ProvidersCharging Mediation

Guiding

Export DWH / ERP /Billing Engine

Reporting

Budgeting

Cost association Cost modelExpense

model

KPIDashboard

Services definition Rating

Billing

External costs

Dev priority

RatingTiers

Define rates that are dependent on another parameter.

I.e. First 3 GiB free, over that 30 c€/month/GiB

Steps

Minimum step to be rated

I.e. 30 c€/mont/GiB, minimum step 5 GiB

Everything under 5GiB is rated as 5 GiB, between 5.001 and 10 as 10, etc

Discounts

Discounting are a modification of rates after rating is done

Advice of charge

Understanding costs before they are accrued

BillingAutomatic billing done by defined period

Hourly, daily, weekly, monthly, yearly

Without customer request (defined by admin, not user)

Wholesale vs. retail

Does not include taxing, payment or collection

Simplified invoicing

Summary vs detail/itemized

Independent on reporting

Take awaysFor strategic management and economic operations

Not for financial reporting

Capable of integrating with financial systems

Multi-layer

Costs

Income

Analysis

Dashboards

Phased approach to development

Thank you!