Large shops tackling chargeback

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THIRTY-ONE PERCENT of IT shops practice some sort of storage chargeback, according to a recent survey of Storage readers (see "Snapshot: Do you charge back for storage?" Storage, July 2006), allowing them to meter the use of storage resources by different groups within their organizations. But who exactly are these people?

Chargeback practitioners are a very self-selecting group, says Patrick Hynds, senior technologist at NTP Software in Nashua, NH. "We find customers absolutely know in their souls that they need chargeback or else it's not an issue for them," he says.

But, in general, chargeback users tend to be very large companies, most likely in the financial sector, says Hynds. These are companies whose cultures are "more bureaucratic, and whose business is accounting for money on a daily basis."

Last month, NTP announced its Storage Billing System, a new module for its Storage M&A product that lets IT bill for storage consumption by department; previously, M&A produced a report that would let IT bill for storage per user.

Some shops charge back not to recoup costs, but to gain an understanding of their environments. Eric Harless, CommVault's product manager for reporting and data protection, calls this "passive chargeback." "They have a mandate to understand the cost of change," he says, "but they're not actually handing anyone a bill."

CommVault helps users perform chargeback with its QiNetix StorageManager storage resource management application or as a function of its Galaxy backup application.

The 69% of Storage readers who don't do chargeback may be intimidated by the work involved in setting it up. "The initial process is very time consuming because you have to understand what data you have out there," says Harless. First, you have to come to some sort of cost model--a cost per megabyte that reflects things like hardware, manpower, maintenance costs or electricity. Most companies opt to keep their cost models as simple as possible, usually focusing on hardware costs.

"You don't want to increase the cost when the cost of power goes up or decrease it if you fire staff," says Harless. Then you define "billable entities"--the departments you're charging back to--and, finally, map the billable entities to servers and applications. On the bright side, says Harless, "once you've set it up, it's pretty much a set-it-and-forget-it environment."

--Alex Barrett

This was first published in August 2006

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