Cloud infrastructure Accounting (part 2)
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 about the time dimension: how long does it take you to perform infrastructure maintenance stuff (e.g. database administration etc.).
After you have defined these values or “dimensions” you can setup a basic accounting structure to keep track of them, like this:
A very important issue in order to make this system workable is this: although the “debits” are quite easy to follow (each time you add something to you infrastructure, you just make a debit, whose real-life equivalent is the vendor’s invoice for the new server, the new router some payroll cost for the administrators jobs execution etc.), the credits need to be tracked following a specific internal process: disk space consumption happens every day (every second, in fact!) and keeping track of it in real-time is impossible. Therefore, you need to establish procedures for the periodic tracking and reporting. For example, you may have your technical manager prepare monthly reports on “consumption” of disk space, processor usage etc. and you translate them into memo accounting entries.
Having surpassed these problems, you now have an accounting system in place to track your resources consumption. If you want to go two steps further with that, here are a couple of more ideas:
Or better yet, you might want to consider using “cost center accounting” for those accounts. So, the unique “DISK_SPACE” account is analyzed to multiple cost centers that represent your customers (hmmm... cost centers in memo accounts… I wonder what a true accountant has to say about this!)
By mixing and matching technical knowledge and basic accounting principles you can establish procedures and metrics to keep track of you XaaS infrastructure and better plan for the future. It will also help you identify areas of under-consumption and probable opportunities for cost cutting. While this is in the daily schedule of your customers, now you can also deal with it.