Proposal for a New Chargeback in ManageIQSergio Ocón ([email protected])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!