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Chargeback in a Virtualized Environment

Identifying the right virtualization strategies and products for your IT infrastructure.

Illustration by Timothy John

By now, chances are you have heard about virtualization. The STG Systems Directions Tracking Study shows that as of September 2006, almost 70 percent of companies had already implemented or planned to implement virtualization within a year. In fact, only 5 percent claimed to be unaware of virtualization.


If you are among the 70 percent, you understand that virtualization may help you take back control of your infrastructure as it enables you to see and manage your computing resources in ways that offer more flexibility, unrestricted by implementation, location or physical packaging. With virtualization, you have a logical rather than a physical view of data, computing power, storage capacity and other resources. By gaining greater control of your infrastructure, you can improve cost management.

While cost saving is a primary driver for initial virtualization deployment, the full value of virtualization lies in its ability to:

  • Improve total cost of ownership (TCO) - By decreasing management costs and increasing asset utilization, you can be able to experience a rapid ROI with virtualization. By virtualizing resources and making them easier to migrate or fail over to other physical devices or locations, you can enhance system availability and help lower the cost and complexity of disaster-recovery solutions.
  • Increase flexibility - By enabling vendor choice, virtualization supports the pooling of resources that can be centrally managed through an enterprise hub to better support dynamically changing business requirements.
  • Enable access through shared infrastructure - Virtualization provides a resilient foundation and shared infrastructure that enables better access to infrastructure and information in support of business applications and service-oriented architecture (SOA).

With all these benefits, we can only wonder, how come companies aren't rushing to virtualize their infrastructures? Our research shows that there are some inhibitors to virtualization, most significant being the capability to quantify value, organizational barriers to fairly allocate virtualized server costs and, when appropriate, chargeback the appropriate user groups.

Some of these concerns are best explained by comments received during a recent IBM*-sponsored qualitative research study (names have been omitted):

  • "People worry they might not get enough resources. They believe they will get less than they need." (Manager of IT, Germany)
  • "It's a matter of convincing people at the beginning because they won't have their own hardware. For us, virtualization worked so long as it was on one platform, but then platforms were assigned to different departments and those departments now had to work together." (Director of IT, Germany)
  • "It involves trying to convince people not to order servers but to allow resources to be pooled into a virtual environment ... trying to convince the business stakeholders to do this. The first moment someone has a problem, they will blame the virtualization." (VP of IT, United States)

Until recently, the perceived drawback to implementing a virtualized infrastructure was the capability to equitably allocate the cost associated with that environment. The inherent complexity of this type of distributed computing environment and the belief that there's no methodology in existence to allocate cost to end users has many managers fearing that IT will become a "black hole" of cost.



Gary Pereyo is a senior consultant with Global Technology Services at IBM. Gary can be reached at

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