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Virtual Chargeback: IBM's New Data Center Move

Quoting from BaseLine Magazine

This month, IBM announced software to help companies track usage and allocate costs in virtualized information environments. It's a breakthrough for I.T. managers, Big Blue claims—but industry executives say IBM may be a little ahead of the game.

IBM says the product, the Tivoli Usage and Accounting Manager, is a critical missing piece for many enterprises looking at adopting virtualization technology, which can consolidate multiple applications onto a shared infrastructure for more efficient operation. The software permits customers to measure virtual server, storage, network and software consumption by department or individual; it then allows that usage to be billed back to individual departments.

"Consistently, the feedback we get is that the inability to provide accurate usage and accounting information is an inhibitor for the adoption of virtualization," says Rich Lechner, vice president of virtualization at IBM.

Lechner says that's because in a shared, virtual infrastructure, organizations need to determine how many I.T. resources individual business units are consuming. While that process is relatively straightforward when applications are dedicated to individual servers, it gets tricky when multiple applications are running on the same physical box.

There's undeniably a need for such a tool, says Sidney Finehirsh, president of New York-based CMX Group, a consulting company that specializes in information-technology chargeback systems. When you're dealing with I.T. chargeback, he says, rough estimates don't cut it. "There are companies that will allocate I.T. based on extraneous factors like head count," Finehirsh says. "But the problem is that if the charge is going to be useful to the business department, it has to be reflective of real cost and it has to be equitable."

But not every enterprise using virtualization technology thinks the lack of an accounting mechanism has been a hindrance.

Matt Ramseyer, senior business analyst at 7-Eleven, says the IBM product "has value, but not in our environment." That's because the convenience-store chain isn't "virtualized in production to the degree that we would be able to take advantage of their offering," he says. 7-Eleven uses server virtualization software from EMC's VMware division for its software development and testing environments.

IBM cited one customer in its press release announcing the software—Arizona utility Salt River Project. Computer analyst Kimberly Jones is quoted in an IBM release as saying Tivoli Usage and Accounting Manager "is doing a great job" and that it has helped the Salt River Project save "a considerable amount of money." When contacted by Baseline for further information, Jones said she was unable to grant an interview. An IBM representative said no other customers were available for interviews about their implementations.

The Tivoli Usage and Accounting Manager is based on software IBM obtained through the January acquisition of CIMS Lab, a privately held software company based in Roseville, Calif. According to IBM, CIMS had 170 large customers worldwide.

CMX's Finehirsh says his company is working with a large insurance company (which he wouldn't name) that is initially analyzing usage of its virtual systems based on those systems' configuration parameters. But those are estimates, not actual usage numbers.

Finehirsh notes that a tool like Tivoli Usage and Accounting Manager—or products with similar capabilities from BMC Software, CA and others—could help determine actual costs in a virtual environment. But implementing chargeback in a virtual environment is very complicated, he says: CMX's clients aren't moving to virtual chargeback models immediately "because monitoring and measurement with a tool like the one from CIMS requires a commitment to that technology."

Ultimately, says Charles King, principal analyst at consulting and research firm Pund-IT, the Tivoli product could demonstrate the value of virtualization by letting users compare the costs of a virtual server with those of a conventional standalone unit.

As King puts it: "This will help companies start comparing apples to oranges."

Read the original article, here.

 

Published Tuesday, June 13, 2006 9:18 PM by David Marshall
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