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Cloud infrastructure Accounting (part 2)

In the previous post we made a brief reference to “tangible” costs and income that the cloud infrastructure incurs/generates to the XaaS vendor. Such issues are well known and adequately followed by standard accounting practices (charging expenses, recording the purchase of assets and tracking their depreciation and, of course, customer invoicing for your income).

The new dimension that we discussed is this of “intangible” or “non-monetary” values that exist in a XaaS infrastructure, and especially the magnitude of unused capacity that is there. In this post I will demonstrate that basic accounting rules and handling can help keep track of these non-monetary values in a way that is transparent and, hopefully, acceptable by the majority of finance managers.

First you need to define what these values are: I spoke about disk space (used and unused), number of physical machines, logical machines and processor cores and average processor usage. Other dimensions may also exist… I also spoke a…

Cloud infrastructure Accounting (part 1)

The whole idea of XaaS is the ability of the customers to add or subtract users or computing power (thus, workload on the vendor’s infrastructure) as they please, because they have tangible monetary benefit from this fluctuation; they pay for more only when they really need it and when they don’t their monthly expenses go down.

This fluctuation creates spikes and valleys in the infrastructure of the vendor, which follow the customers’ “horsepower” needs. There are other metrics, though, that are never (or almost never) decreased. Perhaps the rate of increase fluctuates but it is almost never negative. The most characteristic example is this of the consumed disk space in the infrastructure: it is always increasing (unless of course a massive number of customers leave the service, which is highly unlikely).

These considerations create the need for some kind of accounting tracking of the infrastructure that is being used (or not used) and also some kind of depiction in financial statements