General Concepts » Costs

Costs

A powerful feature of cloudstep.io is to be able to model the cost of running your current and future ICT environment.  There are two types of costs that cloudstep deals with:

  • Capital Costs.  One off or recurrent costs that result in the ownership of an asset.  While this may not meet with financial definitions of "Capital", anything your organisation would normally think of in that way can be considered a Capital cost.
  • Operating Costs.  Periodiic, redurring operating costs for the business and its assets.

Financial Years

cloudstep.io calculates costs on a monthly basis but these are rolled up into Financial Years in some cases.  Particularly in the Cashflow Model and Financial Overview.  A Financial Year begins on the 1st day of the month specified and ends on the last day of the corresponding month in the following calendar year.  In cloudstep this is configurable down to the month (but not the day).  Thus a Financial year Begining in July means:

1st July YYYY - 30th June YYYY+1

Capital Costs

There are two types of model Element that can have a Capital Cost:

  • Projects.  A project is generally consdiered a capital cost in cloudstep.  The budget of the project is capital.
  • Infrastructure.  Some infrastructure such as Compute, Storage, Networking and Facility will have capital costs.  Other types of Infrastructure may also have Capital costs.

Infrastructure has recurring capital costs.  When you create or update a piece of infrastructure you can set the "refresh interval" for the infrastructure.  A piece of Infrastructure should be considered in the abstract to some degree. For instance a piece of Infrastructure that is a ESX Virtual Host may have a capital cost of 10,000.  The infrastructure may have a service life of 5 years (60 month) after which this host is purchased again.  It is a different piece of infrastructure but from the model's perspective it is the same one.  Capital Costs for Infrastructure elements may be avoided if the end date is brought forward or the Infrastructure is associated with a Tombstone.  This means that after this date any further capital costs will not occur.

Operating Costs

Operating Costs apply to the following Element Types:

They apply once per month for every month the Element is present in the model.  If the model is "overshadowed" in a Scenario because it has been replaced (in a migration) or is being retired (via a Tombstone) then the cost does not apply in that scenario.  For this reason you will see the total cost of operating an Application, Implementation or Infrastructure vary depending on the active Scenario.  How the cost applies to the element varies greatly depending on the type of cost.

Cost Accuracy

cloudstep.io understands the concept that some costs will not be entirely accurate.  The costs can be categorised as either:

  • Highly Accurate.  The cost is well understood and the nominal value for the cost is used.
  • Moderately Accurate.  The cost is fairly well understood and a margin of 10% has been placed on top of the cost.
  • Low Accuracy.  The cost is understood but not well defined.  A 25% margin is placed on top of the cost.
  • Placeholder.  The cost has a margin of 100% placed on it.

Cost accuracy is reflected in the Cost Profile and Dashboard.

Cost Categories

Operating costs are broken into Cost Categories.  The categories are:

  • Licensing.  Licensing costs for software which may be annual, monthly or one off (non-capital) payments.
  • Labour.  Costs relating to staffing or some outsourced labour components.
  • Facility.  Rent, Power, Rack space and other facilities charges such as redundant power or UPS services.
  • Managed Services.  Monthly or periodically recurring managed services charges.
  • SaaS Subscriptions.  Monthly or annual per-seat or other subscritpion models for SaaS software.
  • Cloud Infrastructure.  IaaS/PaaS charges and other associated services.
  • Network.  Charges for carriage service, firewalls, WAN management and so on.
  • Other.  A catch-all bucket for miscellaneous costs.

cloudstep summarises these costs by financial year in the Financial Overview and Cost Profile reports.

Types of Operating Costs

There are many different types of operating costs available in cloudstep.  They have different uses and can be used to model almost any situation.  See the documentation for each one for more details on how they work and where/why to use them.

  • Simple Monthly Cost.  Models a wide range of costs that have a simple or linearly increasing amount.
  • EC2 Cost.  This type of cost can be applied to a Server Migration Cloud Service and will work out the monthly running cost of a migrated server based on the original specifications.
  • Azure VM Cost.  This type of cost can be applied to a Server Migration Cloud Service and will work out the monthly running cost of a migrated server based on the original specifications.
  • Labour Cost.  A monthly labour cost based on an annual Full Time Equivalent (FTE) wage.
  • Cloud Storage Cost.  Can be applied to a Cloud Service to calculate the monthly storage cost based on the storage requirements of the original server.
  • Interval Costs.  Costs that apply only during a specific date range.
  • Recurring and Monthly.  Costs that apply periodically and monthly.  For instance once a year and every month.
  • CPU Based Licensing.  Costs that apply depending on the number of CPU cores.
  • Direct Connectivity.  Costs for cloud IaaS/PaaS direct connectivity.
  • Azure Usage Costs.  Models Azure usage from imported invoices.

 

 

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