December 26, 2006

Storage Chargeback Is Problematic

But Getting It Right Could Make A Big Difference

by Andrew Reichman

with Galen Schreck, Rachel Batiancila

Executive Summary (This is a document excerpt)

As data storage grows exponentially, organizations are focused on finding ways to leverage economies of scale and simplify management complexity through centralization. Doing so without a means to charge users based on how much they consume is impractical, as managers have no incentive to conserve and communication lapses between the line of business and the provider of shared storage services. The remedy is chargeback, but interviews with enterprise storage professionals indicate that chargeback is rarely deployed — and when it is, it's often simplified to the point that benefits are diluted. This document is intended to explain why chargeback is so rarely attempted or successfully implemented in enterprise storage and highlight some of the challenges that hamper adoption. The main barriers to a successful chargeback system lay in the areas of budget transfers and timing, setting effective charge rates and penalties, and the mechanics of usage metering. While each one of these tasks is difficult to accomplish, overcoming them and implementing chargeback can have measurable benefits to the overall performance and cost structure of the storage organization.

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