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

e-­‐FISCAL: www.efiscal.eu
EC Contract Number: 283449
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Cost per core hour is not always accurate, however it is probably good enough to get a good
understanding of computing costs.
Alternative approaches should be also attempted such as per application or use case cost
analysis.
Comparing in-­‐house costs with commercial cloud prices is a first good step in understanding how the
two relate. Evidence so far indicates moderate savings in personnel costs when moving to the cloud
(based on sporadically answered questions in the e-­‐FISCAL survey).
Migration to the cloud deserves a different analysis focusing on avoidable costs and time
value of money.
Decisions are not only based on costs. Strategy and policy considerations play a significant role. Other
important non-­‐financial aspects include speed to adjust to increases in capacity demands, the
easiness and willingness of porting applications from one environment to another, security
considerations as well as the facilitation of knowledge transfer and expertise related to leading edge
ICT challenges.
Costs should be well understood, however there may be other priorities (strategies or
policies)
Cost is different from price; profit margin or even loss (loss leader strategy) need to be kept in
mind. And cost is different from value.
In all cases, besides quantitative, qualitative aspects should be examined (e.g. quality of
service and value).
Studying business and pricing models from commercial cloud providers and understanding costs also
helps identify suitable business and pricing policies for e-­‐Infrastructure providers.
On business models:
high utilisation is key to cost efficiency: cloud service brokers should be adopted as a way to
aggregate demand and maximise utilisation of federated infrastructures
integration between e-­‐Infrastructures and commercial providers should be pursued to expand
available capacity to the user communities, variety of resources, service differentiation,
freedom of choice
value added services should be identified (e.g., backup, compliance, specialised user support)
and marketed to better communicate the value differentiation on top of the basic features
On pricing models:
for organisations aiming to directly charge users or their institutions for computing services,
at least two types of pricing models should be defined:
• usage-­‐based pricing scheme to meet the need of elastic demand
• subscription-­‐based pricing scheme to meet the need for longer term commitment
with lower price; different durations should be explored with the demand side
The main recommendations are summarised per stakeholder:
o e-­‐Infrastructure computing providers and HPC/HTC centre managers
e-­‐FISCAL : Financial Study for Sustainable Computing e-­‐Infrastructures
Deliverable D2.3 – Computing e-­‐Infrastructures cost estimation and analysis – Pricing and
Business models
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