THE METHOD AND TOOL
OF COST ANALYSIS FOR
CLOUD COMPUTING
XINHUI LI
YING LI
TIANCHENG LIU
JIE QIU
FENGCHUN WANG
Presented By
Sneha Arvind Mani
OUTLINE
 Introduction
 Calculation
of Cloud TCO
 Calculation
of Cloud Utilization Cost
 Calculation
Tool
 Analysis
 Related
on Balance Factor
Work
 Conclusion
INTRODUCTION
This paper aims at formatting suits of metrics and
formulas for the calculation of Cloud Total Cost of
Ownership (TCO) and Utilization Cost ,
considering the elastic feature of Cloud
Infrastructure and Virtualization in Cloud
 This provides a foundation for evaluating economic
efficiency of Cloud and provides indications for cost
optimization of Cloud.
 Attainment of economic efficiency in Cloud is a
two-step process:

Resources must be applied in an area in which its
benefits outweighs its cost.
 For maximum efficiency to be achieved, resources must
be applied in a way that costs are minimal.

INTRODUCTION(2)
Total Cost of Ownership (TCO) is the cost
attributed to owning and managing IT
infrastructure in a business.
 For Cloud, it’s not only sufficient to calculate and
analyze the TCO but also the cost associated with
real resources committed to a particular user or
application should also be analyzed, which is the
Utilization Cost.
 Elastic resource utilization:

Cloud adopts the architecture which can continuously
adapt to the users’ changing requirements
automatically.
 Current cost analysis technologies do not consider the
elastic characteristics of Cloud. It mainly depends on
each cost item and summary of all cash outlays.

WIDE ADOPTED VIRTUALIZATION
 Virtualization
refers to hosting multiple
applications on a common set of servers.
This allows for consolidation of
application workloads on smaller number
of servers.
 Traditional cost calculation mainly takes
physical servers as the unit to calculate
server cost. With virtualization, the usage
of physical server is consolidated.
 Even the software usage requires
calculating the needed software license by
VM rather than physical server.
CALCULATION OF CLOUD TCO
The items composing the cost of cloud are:
Server, Software, facilities, support and
maintenance, network , power, cooling and realestate.
 With Cloud Cost Amortization model, the
monthly depreciation cost is calculated for each
metrics item from the initial purchase expense
based on the duration over which investment is
amortized.
 Amortizable Rate Paramater is given by

Arp = (1+0.05) * time / (30*24*Ap)
Ap – Amortization period unit ( default is one month)
time – Hours consumed.

CALCULATION MODEL


Server Cost: In Cloud, servers are mounted in
racks and constructed into a resource pool.
Calculation of TCO takes all these servers into
consideration.
Software Cost : According to how software is
licensed, it is divided into 3 types:
Type I : Operating Systems – the license number of this
software equals to the number of virtual images applied
 Type II: Application Server – the license number is
calculated as the number of processors where these soft
wares run.

CALCULATION MODEL(2)


Type III: Management software – their license
number is calculated by the processors they manage.
Network Cost: The cost related to networking is
caused by switches, NIC and cables which are used
to attach physical servers to the network.
CALCULATION MODEL (3)


Network cost:
Support and Maintenance Cost: This metric
includes software distribution and upgrading,
asset management, troubleshooting, traffic
management, servers’ configuration, virus
protection, disk management and performance.
CALCULATION MODEL(4)

Power Cost: Power consumption in Cloud is
primarily caused by Computing Infrastructure
including servers, network switches and Network
Critical Physical Infrastructure, transformers,
fans, ACs, pumps and humidifiers.
CALCULATION MODEL(5)

Cooling Cost: The power consumed at the
datacenter is converted to heat. A Cooling Load
Factor (L) is defined which represents how much
power is consumed by the cooling equipment for
every 1W of heat dissipation in the datacenter.
CALCULATION MODEL(6)

Facilities Cost: Facilities are not equipment but
necessary for the normal running of equipments ,
like PDU, KVM cables. They are all wrapped into
the rack.
CALCULATION MODEL(7)

Real- Estate Cost : Due to the special
infrastructure required like cooling , power, the
space required by a Cloud is more expensive.
Where Sspace is space taken up by all the racks
under utilization.
 The value of pressure confronted by unit floor
cannot be beyond

CALCULATION OF CLOUD UTILIZATION COST
TCO consists of all the servers in resource pool, all
facilities to support these servers. However, Cloud
uses part of these servers and resources to satisfy
users’ workload.
 Cost of the used part of resources, changing
sensitively with various work loads, is important to
know the usage efficiency of given resources. This
is referred to as Utilization cost.
 Virtualization – Cloud providers package arbitrary
user applications as sets of virtual machines. The
basic unit of Cloud consumed is not the physical
servers but VMs the users are applied to.
 A derivation-based approach is required which
calculated the Utilization Cost from input VMs
without dependency on monitoring or accounting.

CALCULATION MODEL:


The three-layer model to calculate utilization-cost.
Adding up all the eight costs gives the utilization
cost.
CALCULATION MODEL(2)


VM Density and Number of Physical Servers: VM
density is the number of VMs that can be hosted
on one physical server. The number of physical
servers is given by
Nvm – Number of applied VMs.
Number of Racks: If we know the space a server
needs and the server number Ns, we can calculate
the number of racks acquired for providing services
UTILIZATION COST

Cloud providers can input derivation rules
specific to their infrastructure. There are 2 ways:
Assign relationship between two different metrics
item
 Assign relationship between cost of two different
metrics items.

All aspects of utilization cost is determined by
the physical server numbers. So if server cost
increase directly, other cost will increase
simultaneously.
 CALCULATION TOOL:


The tool presents the users with a tree of metrics
parameter. Each branch represents a cost metrics
item. Each child label on the branch represents a
parameter under the given cost metrics.
CALCULATION TOOL

Metrics Tree for TCO calculation:

Calculation of Utilization Cost
ANALYSIS ON BALANCE FACTOR
Balance Factor is used to describe the balance
extent of all cost items’ utilization and to indicate
where potential bottlenecks are being developed.
 When a bottleneck is discovered, we need to
consider the connected utilization changes among
various items to balance the bottleneck.

Utilization Parameter
Balance Factor of 0.2126
1
0.8
0.6
0.4
0.2
0
Workload
Various Cost
RELATED WORK

Currently, there are some industrial tools for
TCO:
 Alinean’s tool evaluates their Data Backup
solution with focus on Data Transferring Cost.
 PMTC focus on Network Deployment cost
 Solarrcom focus on evaluation of desktop
devices.
 APC give series calculators for Data Center on
the energy cost and carbon footprint and power
related capital.
CONCLUSION
 In
this paper, cloud TCO is quantified with a
suite of metrics and formulas considering the
characters of virtualization and elasticity
 Utilization Cost leverages the metrics items
defined in Cloud TCO and takes workload.
 These calculation models are developed into a
tool which can execute cost calculation
without knowing exact data and provides a
flexible way to analyze the effect of different
metrics on the cost.
THANK YOU!