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?"

Comments

It's called accounting...

[darkov]

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.

Well, I'm going to hazard a guess...

[djcapelis]

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.

Easy

[duffbeer703]

Whatever your customers will pay.

If you provide value and good service, they will pay alot.

If you do not, they won't.