Hey folks - wondering if anybody's put together a pricing model for IaaS services perhaps?
eg I've got A servers with B CPU cores, C GB RAM and each server cost D dollars. Additionally I've got X dollars in network infrastructure, Y dollars in storage, and spend Z dollars per month on Internet and co-location costs. Given all that, what's my price per CPU, GB RAM, and GB disk?
I've got a model we've built slowly over months, not ready to share that yet but would be interested to compare notes with others if anyone's interested...
This seems to popup quite a bit in the organizations I work with..
First, start with your fixed costs. Power, Cooling, Network and any licensing costs(OnApp, HostBill, WHMCS, etc). From there, you need to look at your variable costs such as bandwidth or costs based on resources you use (vmware points for allocated vCPU and Memory per VM). From there, you will have your "operating cost" per VM or metered resource. Add your markup based on how quick you want to pay off your gear (12-18 months is standard) and keep your time in mind. Things require updates and general Administration so you need to ensure this time is accounted for.
I see you are in CA, the land of wacky pricing so I wish you the best of luck
Hey guys - thanks for the comments. We're a CloudStack house, not really trying to emulate anybody as we're doing something a little different (compliance as a service) but for this discussion, call us yet another IaaS.
I have a fairly good grip on our costs, and understand margins etc. I guess in particular what's on my mind is this: Say you've got a $10k server that has 64 cores, 128 gb ram, and 8tb of disk (random numbers). How does one figure out the cost ratios for a cpu, gb of ram, or gb of disk?
eg monthly cost of a cpu isn't just $10k / 64 (cores) / 24 (months). We currently model 60/25/15 for cpu/mem/disk, but those numbers are seat-of-pants...
At that point, its all about how quickly you want to pay off that server and the risks involved when it goes out of warranty and parts start to need replacing. There is no magic formula for figuring out how much things cost.
You need to come up with some sales figures to see what it would actually take to pay back your investment. IE I need to sell 100 x-large servers to make 10K in 12-18 months.
I would suggest you look at the leaders in the market (Rackspace is really easy to figure out their resource cost) and get some idea of what things costs. Once you have your market price, you can start putting together some educated guesses in terms of sales(ie im going to sell 10 x large servers this month, and another 20 next month).