Showback vs chargeback: Showback new resource analysis tool of choice
Showback was once considered the first step toward implementing chargeback — often hailed as one of the most valuable features of cloud storage. But organizations today are putting showback to great use on its own as a resource analysis tool, and are holding off using the more complex chargeback process.
In a showback vs. chargeback comparison, there’s just one major difference. Chargeback applies the costs of IT services, hardware or software to the business unit that uses them. It has been a goal of IT for years, and the cloud was considered a way to facilitate the use of chargeback. Showback, a term that has been in use for only a couple of years, provides IT, business units and management the same analysis that would be used for chargeback — but doesn’t bill anyone for the services.
To implement chargeback, IT departments hand their company’s business units a formal bill to recover IT costs. That concept hasn’t caught on with most organizations because it’s difficult getting finance departments, IT centers and business units to agree on base metrics.
So showback is becoming the more common way to track usage of IT resources and map them to specific applications, business units and end users without involving the finance or accounting departments. Companies are using showback to instill a culture of cost awareness, to justify requests for new purchases and even make decisions on whether a company has the IT infrastructure to support an acquisition.
“How many use the metrics for measuring? Quite a few do,” said Greg Shulz, founder of Stillwater, Minn.-based storage consulting firm StorageIO Group. “How many [are] actually doing billing? Not the majority. Many use a tool to derive metrics and measurements, but not to actually generate an invoice and chargeback.”
“If you can’t agree on the metrics, the tool is never going to work,” said Phil Godwin, vice president of sales and marketing at Clear Technologies Inc., an IT service provider and consultant company. “Infrastructure is funded project by project. If you do chargeback, how do you ensure a business unit is getting the fair share of the expense?”
Another problem with chargeback is that it’s hard to keep up with ever-changing costs and IT budgets as new servers, applications and other technologies are implemented.
“That budget is always changing,” said Marc Staimer, president of Beaverton, Ore.-based Dragon Slayer Consulting. “It’s always in a state of flux. That’s why the majority don’t even bother.”
A data center engineer at a health care company said he implemented showback instead of chargeback because chargeback has to be integrated with the finance or accounting system. The organization is using Visual Storage Intelligence (VSI), a software-as-a-service (SaaS) product developed by Clear Technologies. The company started using the tool in late 2011 with a goal of using the data to make strategic decisions and to make business units more cost-conscious of IT resources.
“Let’s say somebody asks for another module for an application,” said the engineer, who asked not to be identified because he didn’t have clearance from his company to talk to the media. “We’re able to give them a view into the cost of that added component. At some point, the business unit has to make a choice if that extra feature or function is worth it. Showback raises a level of awareness that these things come at a cost.”
Implementing showback through a chargeback product
Showback capabilities are most commonly implemented through products designed for chargeback, such as NetApp’s OnCommand Insight software, SolarWinds Virtualization Manager, Symantec’s Veritas Operations Manager, VKernal Chargeback and VMware vCenter Chargeback Manager. Storage resource management (SRM), storage resource analysis (SRA) and data protection management (DPM) tools often provide base metrics from software applications through hard drive spindles that can be used for both chargeback and showback.
EMC recently announced ProSphere 1.5, an SRM application that delivers showback capabilities via reports for capacity reporting and analysis. A report can show capacity allocated to the host and application, as well as service-level agreement (SLA) requirements. The product also has a built-in search engine for objects built on a REST interface to work with server integration for the cloud.
Kevin Gray, product marketing manager for EMC’s SRM product group, said most of his company’s customers are more interested in showback vs. chargeback. “We’re not seeing many doing hard chargeback,” he said. “They’re not interested in giving somebody a bill.”
NetApp OnCommand Insight provides end-to-end path visibility into heterogeneous environments and tracks storage utilization and consumption by tenant, business unit, line of business, tier and application. This showback process can help companies save money by seeing how much storage an application consumes and then placing that application on the proper storage tier.
“This information can be used by managers and executives in the business entity to make business decisions on how to optimize their resource usage,” said Kristina Brand, product marketing manager for NetApp OnCommand. “For example, they can quickly see the amount of storage an application takes up for the actual usage, [which] may justify moving that application to a lower tier [to] save money.”
Brand said service providers are using OnCommand to provide itemized or granular reporting and billing to their customers, which is considered a form of chargeback. However, she said cloud providers are more commonly using OnCommand to deliver a granular view of how applications are consuming resources.
“Our customers are still primarily concerned about showback as a strategy for instilling cost accountability,” Brand said.