Slashdot Mirror
Placing a Dollar Value on System Usage?
Anonymous SysAdmin asks: "I wonder how do system admins put a dollar value on system resources? Nowadays we see many hosting providers calculating and summing system utilization like IO operations, processor usage, bandwidth, and RAM into the monthly charges (here's an example). How can they process this info and most importantly how can they put a dollar value on it? What are the common practices in the industry and what are the tools used?"
Have read "The Cuckoo's Egg" by Cliff Stoll
People don't want bandwidth or disk space or CPU cycles, they want a solution.
Do you even lift?
These aren't the 'roids you're looking for.
Have you ever wondered why accountants exist and why they sometimes get paid heaps of money? Because things like costing and pricing can be difficult to calculate, especially for a large corporation. So the short answer is get yourself an accountant or some accounting advice.
The long answer is fixed costs + variable costs + margin = price. Fixed costs are things like rent, depreciation on the hardware, your salary, etc. Anything that doesn't really change according to how much you supply, or doesn't get used up in your supply. Divide this figure per unit of supply. Variable costs are whatever it costs you per unit of supply. And margin is how much profit you want to make.
BTW, IANAA.
Reliable, Great Value Hosting: $7.95/mo 2.4G/120G
This is how business computing started. My mother used to be software support for UCC in England -- they had huge mainframes dotted around the globe and they billed by the minute (obviously easier pre-multithreading). There should be heaps of resources dating back more than 30 years on how to do this sort of thing. Heard of a library?
I'd imagine that instead of pricing carefully most providers just attempt to work miracles and use guesswork.
:)
Figure out how much money you need... and who many customers you can expect, set your prices to get you there.
Or do the delibrate well-thought out option... that might work too.
I touch computers in naughty places
...I wish there was a "Unnecessarily Bitter" option to moderate with =)
"1984" was ment to be a warning, not a guidebook. You hear that Kim Jong-il!? BushCo?!
It will be what the market will bare. ie, if a real systems administrator can be had for 20 thou a year, then systems administrator can expect to make 20 thou/52 weeks/5 days/8 dollars per hours.
The real question is how much need is there for rel system administrator: I ask this because I can be called a systems adminitrator for raintree IT.
I keep the web servers and mail servers running.
They run without fail. these servers collect in accounts maybe 20K a year at most (its a nonprofit)
so how much am I worth? am I worth it all since without me there would be no servers and hence no accounts or can someone else be had for much much cheaper. Will there only be perhaps a few hundred real administrator (ie handling tens to hundred of servers) and how much is that worth?
The question really comes down to how many other people can do what You can do?
If a trained monkey can do it, expect to make as much as a trained monkey (see McDonalds)
QED
Sigs are dangerous coy things
How much does it cost you, how much does it cost to support, how much do you want to profit. The hardware resources requiring taking into account hardware costs, support, electricity, lifetime, etc.
Whatever your customers will pay.
If you provide value and good service, they will pay alot.
If you do not, they won't.
Conformity is the jailer of freedom and enemy of growth. -JFK
they use freebsd. so they're probably using the system accounting tools in most unix/linux systems. see the accton(8), lastcomm(1), acct(2), acct(5) and sa(8) man pages.
US Citizen living abroad? Register to vote!
When it comes to computer hackers, the simple storage of files can start to cost millions of dollars for some reason.
someone has to PAY for it.
You can want solutions all day long - if you are willing to pay the bill.
And trust me - if you are supposed to pay for the use of a gazillion dollar supercomputer, you do not want to pay more than you use.
It encourages efficient and fair use of the system's resources. Rather than run just any program that will produce the desired result, it forces people to consider how their program will affect other users of the system. Maybe that bubble sort isn't such a great algorithm if it uses up your CPU quota for the month in one run.
Mea navis aericumbens anguillis abundat
The companie's CFO and I worked together on it. In general, take the cost of the machine, the depeciation cycle, the cost of maintaining the machine (admin time, support, replacement parts, bandwidth, hosting or space in the office, etc.) to get a cost per time unit. Then, using a system accounting package, estimate CPU, disk and bandwidth usage.
At this point, the accountant has to determine reasonable values for each of those, and not being an accountant, I can't speak to how that is done. Once you're this far, though, costing is simply division.
If you need to price it, that's a different matter entirely.
I forget what 8 was for.
(IT Dept. Budget/12 Months)/# of computers in company = Monthly $$/computer charged to each department.
Usage? irrelevant.
You laugh, but this is the way my company does it. No, really. And it kinda sorta works.
"As God is my witness, I thought turkeys could fly." A. Carlson
My boss asked me to do this not long ago ... We took several factors into our calculation at my corporation. We were doing it on a server by server basis, so keep that into mind.
1) Cost of server hardware as a function of the time it would be in use
2) Cost of server OS (Window 2000 Server) over same time and over users
3) Cost of bandwidth used (fraction of total bandwidth)
4) Cost of maintaining server (personnel, electricity, hazard prevention, security, upgrades, general analysis tools)
5) How important the server was to the overall network infrastructure (objective, as in the DHCP server is worth+)
Obviously, the equation will be different for every server and every organization, but that's a general overview.
***