How virtualization managers can implement chargebacks

To achieve virtualization efficiency, data center owners may be satisfied with the lesser element of showback

For some of us who have been doing server virtualization for a number of years, the idea of virtualization chargeback may seem like a no-brainer. But as we close out 2012, believe it or not, many organizations are either just now getting their feet wet with server virtualization or private cloud environments, or they're finally expanding and moving to the next stage of their virtualization journey. These folks may not yet be at a point where they can start charging back for these virtual resources being used.

If we consider virtualization to be a journey, then the idea of chargeback or the ability to price and cost a virtualization environment should be considered a journey within a journey. (Does it sound like I just saw "The Hobbit" this weekend?)

[ Also on InfoWorld: Red Hat Enterprise Virtualization 3.1 edges closer to vSphere, Hyper-V | VMware vCenter Server 5.1 will soon support Microsoft Hyper-V servers | Track the latest trends in virtualization in InfoWorld's Virtualization Report newsletter. ]

As an organization makes its way down the virtualization maturity path, moving into chargeback assumes that the IT department has done its homework of assembling the true virtualization pricing and costs involved, with a clear buy-in from the business.

In many organizations, chargeback rules are directed by the finance arm of the company. Unfortunately, many of these rules live in a physical, legacy world where the chargeback model requires a vendor invoice or receipt in order to pass on that charge to the line of business. As is the case with physical server equipment, it's usually an asset that can be tagged and touched.

But that model fails to translate well in a virtual world. In a virtual data center, hardware is being shared; the idea of one application per server or the understanding that one server belongs to a single business unit is a thing of the past. Instead, IT organizations have to look at alternative methods such as charging users for the resources that are either allocated or consumed within a shared environment (sharing the use of CPU, memory, networking and storage).

The question then: How do you charge a business unit for using a fraction of a server that took you 10 minutes to setup and deploy? And how do you implement a fair model that everyone will understand and readily accept? And are companies ready for this?

Alex Rosemblat, product marketing manager at Dell, told InfoWorld he has noted a general trend over the last year where there are more requests for chargeback within a virtualization management solution, but for an overall flow, the number of prospects asking for this capability is still less than 10 percent.

He went on to say, "The most interesting thing about when some form of cost measurement is requested by a prospect, it is almost always seen as a 'need to have' rather than a 'nice to have,' -- i.e. people that ask for this are dead set on quickly rolling out chargeback in their organizations."

Rosemblat's coworker, Bryan Semple, chief marketing officer for VKernel (now part of Dell), said the concept of charging back is just not gaining traction, likely due to accounting rules, issues with integrating into account systems, and the basic operating procedures for IT.

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