IBM Systems Magazine, Power Systems - April 2017 - 11
need as many cores as we used
before. Those are our cheapest
MIPS. Our actual expense only
went down about $30,000."
George looks perplexed. "Why
were we charging them $800,000
if this application only costs
"I think it has to do with the
way we average things," Fred
explains. "Many of our costs are
fixed, so when we remove LPARs,
our costs don't go down much.
The idea of the Power enterprise
server is to put lots of work in it
to defray the overall cost. Taking
work out doesn't really decrease
the fixed-cost burden, so it leaves
the last remaining applications
and LPARs with carrying all of
the burden and drives up their
cost. While it makes sense to the
platform defector to leave based
on the chargeback cost, it isn't
necessarily a good decision for the
"But," George asks, "Why are we
down by $1 million?"
Mary reveals a chart (see
Figure 1, page 12).
"We charge $300 per image per
month for a typical virtual image,"
Mary explains. "We base that
chargeback on the average cost of
an image. However, this application was exceptionally demanding
on the processors, and instead of
costing $108,000 for 30 images,
it actually cost $338,000. So we
ended up with a funding shortfall
when this application got added.
Now we'll have to spread that
against all of our other users."
George looked worried. "Wow,"
he says. "Do you see where this
is headed? No wonder this is a
recurring problem. Accounting just
saved $692,000 by switching platforms for the XB application. Now
everybody else's costs are going to
go up and we're going to get more
of these platform changes. We're
spending money as a company to
make poor platform choices based
solely on our chargeback scheme.
We need to fix this."
Unfortunately, scenarios like this
Chargeback systems have become
a bigger issue over the past few years
because what used to be an arcane
accounting function has increasingly
become a decision-making tool.
Simple systems designed to spread
budget allocations are simply not
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ibmsystemsmag.com APRIL 2017 // 11