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Re: Idle Capacity on Cloud in Financial Statement

Shawzer Mar 13, 2012 5:30 PM
Posted in group: Cloud Computing
Hi Dien -

I've tackled this before. If you treat it like a support center (no
profit or lose) you credit/charge out the remainder per business unit
usage.  Call it adoption rate. :)  To back into this, let me expand on
the front end. This is a high-level discussion and variables do exist,
salt to taste.

Your first goals is to understand what over subscription rate you are
looking to benchmark against then you can divide out the approx.
"useful" capacity of a given set of resources, like CPU, RAM, Disk.
Then factor in your depreciation rate for more accuracy.

Given over subscription:
CPU 4/1
RAM 2/1
Disk 4/1 (think thin disk provisioning - splash of dedup too)

Given depreciation:
Server 48 months
Storage 42 months

This gives us a "maximum' allocation of resource. Take the maximum
allocation and subtract actual allocation to get "idle" resources. For

A quantity of 4 2-socket quad core servers with 1T RAM. That is 32
core and 4T RAM. Over subscription (virtual cores) at 4/1 should be
128 virtual cores and RAM at 2/1 should be 8T RAM

50T of disk over subscription at 4/1 is 200t disk.

Max allocation
128 virtual cores
200T disk

With this you can take "max" then subtract  the sum of actual virtual
CPU, RAM, Disk and show an approx "idle" space.

For a bonus, you can back into resource cost too.  Total resources
divided by an algorithm to derive resouce allocation cost.
Virtual core $100
RAM $50
Disk $10

Now you can tie ROI back to the business and tie financials to actuals
and apply toward forecasting capacity models. Over time, you should
see a cost adjustment, usually down, that represent the "fine tuning"
of actual resource allocations - as over subscriptions rates are a
guideline and not a hard fast rule.

On Mar 6, 7:00 am, Dien Muhammad <> wrote:
> Hi All,
> Is there anyone from Cloud Service Provider who knows how their Financial &
> Accounting Dept treat the idle capacity in their Financial Statement? Need
> to justify the policy here.
> Many thanks
> Regards,
> -dien-