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How to Automatically Calculate and Bill for Virtualization

By February 16, 2021June 8th, 2023No Comments

Servers are powerful machines, hosting files and applications and running complex tasks with ease. Administrators often dedicate each of their servers to one specific application or task. But this approach is not always ideal. First, it doesn’t usually take advantage of the server’s full processing power. Second, servers take up a requisite amount of physical space. They also consume a lot of power and produce a great deal of heat.

Another common tactic is converting one physical server into multiple virtual machines via specific software. In this scenario, each virtual server acts like a unique physical device running its own operating system. This leverages the full power of the machine and generates a smaller physical footprint. It’s called virtualization.

Advantages of virtualization

One of the most significant advantages of virtualization is it eliminates the need to buy more hardware. It also means less time and money spent on equipment maintenance and support. 

Backing up data is also easier using virtual machines. Virtual servers take up-to-date snapshots and redeploy them seamlessly to your other devices. Virtual backups decrease the waiting time for server reboots. 

This makes accidentally losing files a thing of the past. If and when disaster strikes, these virtual machines can easily migrate to another server.

Virtualization also enables a higher degree of technological versatility. It is easy to opt for running different platforms, servers and hardware and to not be stuck with one IT provider. Upgrading hardware can be accomplished without long server downtimes.

Last but not least, utilizing fewer servers is better for the environment. Generating less energy and less heat could be a significant benefit for companies looking to become more sustainable.

Costs of virtualization

Before being able to charge for virtualization, knowing what the costs are is crucial. So, how do we calculate virtualization? The answer involves measuring computing costs, computing capacity, and anticipated usage.

Fixed and recurring costs

Fixed costs per server include physical servers, physical storage, hypervisor licenses, and management software. And then there are the recurring annual costs per server: think network connectivity, storage connectivity, software maintenance, and hardware maintenance. 

Computing capacity

Now determine the amount of computing capacity that can potentially be provided to virtual machines. In addition to the storage array, figure out the number of effective servers (excluding redundant servers.) 

Take the total amount of memory, processors, and clock cycles available per server into account. Decide the percentage of memory and processor capacity per server that you intend to reserve, and the percentage of memory and processor capacity intended for overcommitting. 

Translate this into monthly and hourly costs by determining the availability of deployment. 744 hours per month is the standard benchmark.

Estimated usage

Now that the costs per GB of memory, GHz processor time and storage per VM instance are known, a monthly flat fee next to flexible plans and set up fees can be determined.

Think of a menu of small, medium and large virtual machine plans. Different offerings will cater to different needs, where memory, processor cycles and storage can all be flexible. 

Billing for virtualization

Obviously, this is a simplified example of virtual machine cost analysis. Other factors such as network bandwidth or data center energy costs can and should be included.

Knowing what fee to charge might be complicated, but billing for virtualization should be a smooth and easy process for your customers. Ubersmith provides a scalable platform that can grow as service providers expand their offerings to their customers from a single platform.

Ubersmith was first developed for the cloud and hosting provider industry. With over 15 years of product enhancements and innovation, our solution has developed into a robust, secure billing and business management software product.

The Ubersmith solution is designed to streamline the operations of cloud and hosting businesses. Its unique features and integrations specifically fit industry needs, including device management, organization of monitors and custom device data, and customer and service associations.

As the most comprehensive and scalable business management and hosting billing software on the market, Ubersmith offers subscription billing, customer management, sales management, order management, infrastructure management, and help desk ticketing specifically tailored for the cloud and hosting industry. These modules can be customized to fit your needs via Ubersmith’s extensive documentation and API.

We can help with billing for virtualization

We offer seamless, integrated management and billing tools in the cloud. Reach out via to find out more about how Ubersmith can help you make a success of your subscription model.

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