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Placing a Dollar Value on System Usage?

Posted by Cliff on from the estimating-costs-and-padding-fees dept.

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?"

8 of 26 comments (clear)

  1. I thought it was traditional by camelrider · · Score: 4, Informative

    Have read "The Cuckoo's Egg" by Cliff Stoll

  2. It's called accounting... by darkov · · Score: 4, Insightful

    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.

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  3. Well, I'm going to hazard a guess... by djcapelis · · Score: 4, Insightful

    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
  4. Times like these... by thecampbeln · · Score: 3, Funny

    ...I wish there was a "Unnecessarily Bitter" option to moderate with =)

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    "1984" was ment to be a warning, not a guidebook. You hear that Kim Jong-il!? BushCo?!
    1. Re:Times like these... by Kris_J · · Score: 3, Funny

      As long as it's "+1 Unnecessarily Bitter" I'm cool with that...

  5. Easy by duffbeer703 · · Score: 3, Insightful

    Whatever your customers will pay.

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

    If you do not, they won't.

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    Conformity is the jailer of freedom and enemy of growth. -JFK
  6. system accounting by kevin+lyda · · Score: 4, Informative

    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.

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  7. Talk to your bean counter by abulafia · · Score: 4, Informative
    In a former life, I had to do this for a dot com. This was on a consulting basis, and as an annoying (for me) side project.
    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.

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