VMware addresses virtual machine chargeback

VMware vCenter Server is VMware’s set of virtual infrastructure management tools providing virtual administrators with what they need to manage their VMware ESX environments.  To add to that toolset, the virtualization giant recently launched a new add-on product called vCenter Chargeback 1.0.  With its launch, VMware has formalized the chargeback function as a separate software tool for vCenter business users, making bean counters in the accounting department happy while making department heads a bit nervous.

As you might expect from its name, vCenter Chargeback helps IT departments and business units determine the costs associated with operating a virtual infrastructure.  With it, VM resources can be broken down and allocated to specific users, cost centers, or business units within an organization — it even helps with external customers.

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vCenter Chargeback supports the following cost models: fixed costing, where virtual machines are billed at a flat rate with specific costs such as floor space, power/cooling, software, or administrative overhead; allocation-based costing, where variable costs per virtual machine are based on allocated resources such as the amount of memory, CPU, or storage; and utilization-based costing, where variable costs per virtual machine are based on actual consumption.

The need for chargeback has been growing over the years as virtualization technologies have continued to mature and its adoption rate increased.  Business units are becoming more confident with sharing resources, but still may not be ready for a full-blown chargeback implementation.  For those environments, VMware offers something called “showback” rather than chargeback.  This is a way to slowly break business units in to this new form of accounting and shows them the breakdown of resources that specific virtual environments have consumed.

Chargeback automatically creates detailed billing reports that can be submitted to business units within an organization. VMware claims this provides business units with a clear view of resources consumed and their associated costs, eliminating the perception that virtual machines are free.  And with Chargeback, administrators have a key building block for delivering IT as a service.

But this new tool comes at a price.  It isn’t included in your vCenter package.  The current list price is $750 per managed processor, which could be an eyebrow-raising price tag for some.  Even though many users understand the value of what Chargeback brings to the organization, at that price, it could be a hard sell to get upper management to sign off on something that could save them money down the road.

And that’s too bad.  It doesn’t just have to be about climbing political barriers and providing numbers for the accounting department.  Implementing solutions like chargeback could also help prove out your virtualization success story.  It can help with resource utilization, limit VM sprawl, and increase VM-host ratios.

For a 1.0 release, VMware vCenter Chargeback seems fairly granular and feature-rich.  But there are cheaper solutions out there on the market from third-party vendors.  Will VMware’s feature list, the thought of tighter integration between product and platform, and having support come from the virtualization hypervisor provider itself be enough to justify the larger price tag?  Let’s not forget that all chargeback solutions from the various software vendors will still need to deal with political barriers, although showback at this stage of the game may prove to be the most successful piece of the puzzle.