Do You Know How to Cast Accounts on the Cloud?

  • How can we make a budget?
  • How can we save more money?

Defining On-Cloud Cost Allocation

In addition to understanding on-cloud consumption by calculating costs, enterprises also need to figure out how money is spent in a more fine-grained manner. This is what we call account splitting. Account splitting helps enterprises separate on-cloud expenditures by applications, projects, and departments. In this way, enterprises will know the ROI of each project.

  • Chargeback: Casting accounts by departments. In addition to the review, each business unit will calculate IT spending and manage budgets independently. Many traditional enterprises and MNCs adopt this mode.

What Are the Problems with On-Cloud Account Allocation?

Since both Showback and Chargeback are standard practices, why are their weaknesses amplified after migration to the cloud? With a traditional self-built data center, the procurement of the IT infrastructure is strictly executed according to the process of the enterprise’s financial budget, procurement, and delivery. The cost can be well managed by teams or projects. After the enterprise migrated to the cloud, it completely broke the “system” and encountered several major situations:

What Should Enterprises Do If They Want to Split Accounts?

A: Establish a Process of Leadership Review

Account splitting’s implementation must be supported by a leadership review. Cost accounting should be a part of the monthly or quarterly business review. Thus, the orderly conduct of other processes can be guaranteed by this top-to-bottom mode.

B: Split Accounts by Users’ Account

Presently, many enterprises choose the multi-account mode based on resource directory management for cloud migration. In this mode, each application is an independent account in the application directory. Therefore, all expenses under this account can be fully included ins the costs of this department. We recommend our customers to use the IT Governance Workshop for Group Enterprises for multiple accounts, which will soon be released by Alibaba Cloud Open Platform. In this IT Governance Workshop, we have best practices for account naming and folder organization.

C: Split Accounts by Tags — Dedicated Resources

If multiple departments share an account, users must add tags to distinguish the purpose of resource utilization. In this process, the O&M team is responsible for distinguishing the function and execution method of tags:

  • Enterprises with weak O&M capabilities choose to manually add tags in the console or use MSP to outsource the work.

D: Split Accounts for Shared Resources

For shared resources, such as CEN, NAT gateways, traffic packets, advance payment of Reserved Instance (RI), and support plans, cloud service providers do not provide more fine-grained solutions for account splitting. Currently, the common practice is to split an account according to a fixed proportion that has been negotiated.

  • RI: RIs are usually purchased in central procurement for IT resources to optimize internal costs. In general, to optimize 60% to 80% of the fixed cost, we won’t purchase too many RIs. Since the match of RIs is random to a certain extent, the partial “unfairness” may exist in the bill. Considering that RIs’ feature of providing the overall optimization solution, its specifications, and the use of virtual machines with this specification in various departments, a more complicated formula will be used when splitting this part of costs.
  • Container Application: A container service cluster is typically shared by multiple applications at the application layer. The costs of using the container service cluster are shared by https://kubecost.com/ to further allocate costs by application based on the basic resources dimension of IaaS.

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