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Tool: Reading the Meter

By Baselinemag  |  Posted 2002-12-03 Print this article Print
 
 
 
 
 

Use our online calculator to determine the costs and benefits of implementing a network based on a pay-as-you-go approach.

Use the worksheet below to calculate the costs and benefits of implementing a network based on a pay-as-you-go approach. This example, taken from a model created by utility computing software vendor Ejasent, pools computing resourcse for an enterprise or a service provider to use in its own data centers.

Instructions: Only enter values in steps A, B, C, E and F below. The other values will be calculated automatically for you.

Step 1: The Basics
YOUR COSTS EXAMPLE
A. How many servers do you want to eliminate?

75
B. How many CPUs does each server have, on average?

4
C. What is the average total cost of ownership per server per year?

$ $48,000
Step 2: Costs & Benefits
D. This subtotal will show how much you could save over three years.

$ $10,800,000
E. How much will it cost to move the servers (listed in step A above) to utility computing?
Fixed setup fees begin at $50,000, but could range as high as $1 million.

$$250,000
F. What are your per-processor costs?
In our example, the meter runs at $2,500 per processor per year.

$$2,500
G. This subtotal shows how much usage fees would run over 3 years.

$ $2,250,000
H. Net savings: This subtotal subtracts cost and use fees from the potential savings.

$ $8,300,000
Step 3: The Return
ROI. Here, you'll find the 3-year return on your investment by dividing the net savings by the total costs. % 332%
Payback period. This shows how many months after setup you'll see a return, assuming amortization over 3 years. months 8.33 months
   



Full story
Find out more in Baseline's primer on utility computing.



 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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