Cloud IT billing - or getting to IT costs transparency

There are a number of elements and parameters that goes into cloud billing, or billing all the IT service elements that goes into a cloud IaaS or PaaS IT delivery, be it in private, public or hybrid fashion.
Cloud SaaS delivery and billing appears to be a much easier set-up and process, as most SaaS services are billed per licensed seat or per user.

For cloud IaaS service delivery, some of the main elements are listed in the overview below, and centers around the three main IaaS service elements of processing or virtual machines, storage and networking.

1. Processing: 
• # Cpu cores per sec, min, hour etc or fixed number of VM cores per month
• Dedicated, reserved/assigned or pool CPU cores
  
2. Storage: 
• Storage volume
• File type: Local HDD storage (persistent or non-persistent for VM), SAN or object storage
• Storage types: Processing/VM storage, data storage and back-up, off-site back-up, disaster recovery
• Number of IOPS (input/output operations per second, i.e. reads and writes from/to a storage domain): This one can get quite tricky with the number of IOPS parameters involved and hard to determine up front before actual, real-life production levels has been reached for a storage-based service.  Many providers balance cheap storage volumes with steep IOPS levels, so if an application or web-service has any significant storage traffic or transactions, then that cheap storage isn't that cheap anymore if one factors in IOPS and storage network traffic volumes.  Be aware!  IPS usually comes in different IOPS classes, for instance x-thousand per VM/month, or x-thousand per disk-volume per month.
  
3. Networking: 
• VM networking capacities/volumes: Traffic volume per billing period, and/or speed (Mbps/Gbps) thresholds
• Internet access capacities or volumes, per region (i.e. Europe, North-America, SE Asia etc)
• Firewall services, per VM, for the IaaS/DC server farm in question
• Load balancing (between VMs, DCs, regions)
• Cache, proxy, reverse proxy services
• Virus control
• Denial of service protection, basic or extended, for VMs, between VMs, for DC in question or at operator backbone perimeter
• Distribution services, object or dynamic caching, web acceleration or CDN services

Besides the "basic" billing units and parameters for cloud IT services, there are a number of other factors that needs to be covered as well to provide meaningful, transparent IT billing for companies and customers.  Some of them are

1. Overview of the the logging, correlation, mediation and aggregation set-up. Customers needs to understand how IT service activities and usage are logged, correlated across VMs, server farms, DCs or service delivery regions (i.e. that one log entry means the same across different production units), how some log entries are transformed or mediated into different billing units and how all the activity/usage entries that has been logged, correlated or meditated, are aggregated into high-level billing units.  Cloud IT billing, or any IT billing, IT TCO or ROI exercise needs full transparency in this area, or one is left with black-box IT billing.
   
2. It must be possible to collect cloud IT billing automatically or per self-serve interface into a main customer account, or split the cloud IT billing on several parties, be it across different enterprise unis or departments, projects or delegated service account.  It must also be possible to have different entries or receivers for service owner, legal owner ad billing recipient for a cloud IT service.
   
3. All the billing data should be available in defined format to open API or DB access for 3rd party billing analytics, so that customers can look into how their cloud IT utilization and costs are coming together over time and where service utilization can be optimized.  Als customers needs the cloud IT cost side to come together with their revenue side and establish historical overview of margins, cash-flow, ARPU and customer developments (good, bad) and put a weight as well as cost/performance goals on VM and storage utilization, cost of on-demand campaigns/periodic offers etc.

These billing elements and parameters have been included in the cloud IaaS checklist that I wrote about in an earlier post, and goes into the overall service requirements for an cloud IT service and delivery.


Erik Jensen, 4.11.2013