Tool: Reading the Meter

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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
A. How many servers do you want to eliminate?

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

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.

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

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.

This article was originally published on 2002-12-03
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