vnunet.com comment: Clive Longbottom on value-based SLAs

Cross charging within a company is a great way to waste money, says Clive Longbottom

A little while back, I was talking with Dr Bernd Kosch, chairman of the Enterprise Grid Alliance (EGA), now to be the Open Grid Forum, and we got on to the issues of cross-charging within a utility-style environment.

My feeling has always been that cross charging within a company is a great way to waste money.

You start with, say, 1,000 local currency units as positive value on the corporate bottom line. You then spend some of this in measuring how much technology is being used by the different parts of your own company.

Also, the very measurement of this usage uses some of the technical resources that you would like to make available to the users. Having identified what the users are using, you then raise an internal invoice for them.

The users question the usage (or not) and finally 'pay'. Except they don't. All we've done is shuffle nominal monetary units around and no-one has created anything of value.

The problem is that the 1,000 local currency units that we started off with against the company bottom line have suddenly become 900. We've lost money, we've used technical resources and we've allocated human resources only to lose the company money.

But it seems that measuring IT and trying to get money from its users is pretty widespread, and my lone voice in the wilderness is unlikely to change that.

What is likely to drive a change in thought processes is the move to service oriented architectures (SOAs) based on utility computing architectures such as grid.
Why? Well, how are you now going to measure usage? You can't point to a server and say 'that belongs to sales' because it's all virtualised. You can't easily allocate physical storage usage to discrete groups because again it's all virtualised.

You can't even look at application usage; we're talking composite applications created on the fly from reusable components here.

So does this presage the end of cross-charging? Not likely. What Dr Kosch and I were discussing was the move to value-based service level agreements (SLAs). And what, you may ask, is a value-based SLA?

The way we looked at it (and there is a focus group set up in the old EGA that was looking at this) is that once we have functional components on a highly virtualised infrastructure, we can begin to look at applying differing service levels depending on the internal customer.