D2 3 Computing e-Infrastructure cost calculations and business _models_vam1-final

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e-‐FISCAL: www.efiscal.eu EC Contract Number: 283449 3. Methodology The e-‐FISCAL project has applied the methodology discussed in this section in order to achieve the project’s goals. As the main focus of the project lies on costing issues the graph that follows concentrates on the development of the costing model and its operationalisation in order to come up with sufficient data to answer the first three research questions (i.e. Research question 1: To analyse the cost structure of HPC and HTC centres, Research question 2: To approximate the cost of the HPC and HTC in Europe and Research question 3: To compare the cost of HPC and HTC centres with commercial Cloud Offerings). However, along this procedure input useful to address the secondary two research questions (i.e. Research question 4: Identification of suitable business models and research question 5: An analysis of the Green IT initiatives in HPC and HTC centres) is gathered. The methodology comprises six stages that are presented in the graph below and are discussed in the rest of the methodology section: • State of the art review • Development of the generic cost model • Sample selection • Questionnaire development • Questionnaire dissemination and follow up • Analysis of data and conclusions A graphical representation of the sequence of these steps is shown in Figure 6. State-of-the-art review in costing issues Collection of data, Cross-checks Benchmarking Conclusions-findings Development of a Costing model Sample identification Questionnaire development Questionnaire dissemination, follow up Figure 6: Overview of the proposed methodology 3.1 State of the art review The state of the art has been analytically discussed on Section 2. In summary, this methodological step comprised a detailed review of the relevant literature. The review covered academic papers, industry project results, EU studies’ results, vendor analyses and relevant studies to acquire an overview of the current state of the art relevant to the scope the project. This first step had multiple orientations including the identification of relevant research works that dealt with e-‐Infrastructure costing issues in general (Afran and Bancalore, 2007; Walker, 2009; Nazir and Sorensen, 2010; Opitz et al, 2008), electricity and premises costing (Koomey, 2008; Jie et al., 2011), business models applied by e-‐Infrastructures (EGI-‐InSPIRE EU deliverable D2.7, 2011), papers that compare cloud and grid options (Foster et al., 2008; Kondo et al., 2009) or discuss cloud computing issues (Klems et al., e-‐FISCAL : Financial Study for Sustainable Computing e-‐Infrastructures Deliverable D2.3 – Computing e-‐Infrastructures cost estimation and analysis – Pricing and Business models 32
e-‐FISCAL: www.efiscal.eu EC Contract Number: 283449 2009; Hammond et al., 2010; Microsoft, 2010; Kim et al., 2009), papers that discuss the migration to the Cloud (Misra and Mondal, 2011), industry benchmarks (Crosswell, 2010), case studies (Hyak operating costs 32 ) etc. All papers reviewed are found on the project’s state-‐of-‐the art repository (http://www.efiscal.eu/state-‐of-‐the-‐art). The repository contained as of 31/1/2013 50 references. 3.2 e-FISCAL costing model characteristics The thorough state of the art review provided useful input to develop the costing model in at least two dimensions. Firstly, we had to decide on the cost categories to be included in the analysis and secondly on the costing methodology. As for the cost categories we decided to abide by the cost categorizations proposed by Optiz et al. (2008). This cost categories could be considered as standard in relevant cost studies. As for the costing methodology, we built a hybrid costing model that capitalises on Total Cost of Ownership (TCO) and the Full Cost Accounting (FCA) methodology properly adjusted to the characteristics of the project. 3.2.1 Costing methodology The hybrid methodology developed for the scope of the project is suitable to calculate the total yearly cost of computing e-‐Infrastructures. Its materialization requires a two-‐step process: a) Simulation of the physical infrastructure and b) Development of the financial model. a) Simulation of the physical infrastructure: This corresponds to the investment cost of the infrastructure which is approximated by taking into account the capacity in terms of cores, of storage devices, of interconnection devices and of auxiliary equipment and the actual purchase values of these elements. b) Development of the financial model: The financial model is based on two pillars. The annualised cost of the simulated physical infrastructure and the operating cost of the physical infrastructure. • The annualized cost of the simulated physical infrastructure is derived by applying depreciation rates to annualise the cost of the physical infrastructure simulated in the first step. This amount accounts for the yearly CAPEX (Capital expenditures). • The operating cost of the physical infrastructure corresponds to the yearly costs for running the site/centre. In order to approximate the running cost, information about the operating costs is gathered per cost category (e.g. personnel costs, electricity, premises cost, etc.). This amount accounts for the OPEX (operating expenses). More specifically, the cost categories that are included are as follows: 1. Computing and storage hardware costs. This category refers to CPU cores (and corresponding boxing), storage devices (disk and tape storage facilities) and related interconnect equipment (network devices). Service support costs fall in this category. 2. Auxiliary equipment costs, that correspond to the investment in cooling devices (air or liquid cooling), UPSs, power generators, power transformers, etc. 32 http://escience.washington.edu/get-‐help-‐now/hyak-‐operating-‐costs-‐and-‐comparison-‐commercial-‐alternatives e-‐FISCAL : Financial Study for Sustainable Computing e-‐Infrastructures Deliverable D2.3 – Computing e-‐Infrastructures cost estimation and analysis – Pricing and Business models 33
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