Virtual Chargeback: IBM's New Data Center Move

By CIOinsight  |  Posted 06-13-2006

This month, IBM announced software to help companies track usage and allocate costs in virtualized information environments. It's a breakthrough for I.T. managers, Big Blue claims—but industry executives say IBM may be a little ahead of the game.

IBM says the product, the Tivoli Usage and Accounting Manager, is a critical missing piece for many enterprises looking at adopting virtualization technology, which can consolidate multiple applications onto a shared infrastructure for more efficient operation. The software permits customers to measure virtual server, storage, network and software consumption by department or individual; it then allows that usage to be billed back to individual departments.

"Consistently, the feedback we get is that the inability to provide accurate usage and accounting information is an inhibitor for the adoption of virtualization," says Rich Lechner, vice president of virtualization at IBM.

Lechner says that's because in a shared, virtual infrastructure, organizations need to determine how many I.T. resources individual business units are consuming. While that process is relatively straightforward when applications are dedicated to individual servers, it gets tricky when multiple applications are running on the same physical box.

There's undeniably a need for such a tool, says Sidney Finehirsh, president of New York-based CMX Group, a consulting company that specializes in information-technology chargeback systems. When you're dealing with I.T. chargeback, he says, rough estimates don't cut it. "There are companies that will allocate I.T. based on extraneous factors like head count," Finehirsh says. "But the problem is that if the charge is going to be useful to the business department, it has to be reflective of real cost and it has to be equitable."

But not every enterprise using virtualization technology thinks the lack of an accounting mechanism has been a hindrance.

Matt Ramseyer, senior business analyst at 7-Eleven, says the IBM product "has value, but not in our environment." That's because the convenience-store chain isn't "virtualized in production to the degree that we would be able to take advantage of their offering," he says. 7-Eleven uses server virtualization software from EMC's VMware division for its software development and testing environments.

Read the full story on eWEEK.com: Virtual Chargeback: IBM's New Data Center Move