eChallenges e-2012 Conference Proceedings Paul Cunningham and Miriam Cunningham (Eds) IIMC International Information Management Corporation, 2012 ISBN: 978-1-905824-35-9 Copyright © 2012 The Authors www.eChallenges.org Page 1 of 8 The Strategy of the Commons: Modelling the Annual Cost of Successful ICT Services for European Research Matti HEIKKURINEN 1 , Sandra COHEN 2 , Fotis KARAGIANNIS 2 , Kashif IQBAL 3 , Eoin BRAZIL 3 , Sergio ANDREOZZI 4 1 Emergence Tech Ltd, St James House, 8 Overcliffe, Gravesend, Kent, DA11 0HJ, UK Tel: +41 (0)79 703 7347, Fax: +41 (0)86 0797037347, Email: matti@emergence-tech.com 2 Athens University of Economics and Business, Address, Athens , 104-34., Greece Tel: +302108203168, Fax: + 2108203164, Email:scohen@aueb.gr 3 Irish Centre for High End Computing (ICHEC), The Tower, Trinity Technology and Enterprise Campus, Dublin, D2, Ireland Tel: +353 1 5241608, Fax: + 353 1 7645845, Email:{kashif.iqbal, eoin.brazil}@ichec.ie 4 EGI.eu, Science Park 140, 1098 XG Amsterdam, The Netherlands Tel: + 31 (0)20 89 32 007, Fax: + 31 (0)20 592 5155, Email: sergio.andreozzi@egi.eu Abstract: The provision of ICT services for research is increasingly using Cloud services to complement the traditional federation of computing centres. Due to the complex funding structure and differences in the basic business model, comparing the cost-effectiveness of these options requires a new approach to cost assessment. This paper presents a cost assessment method addressing the limitations of the standard methods and some of the initial results of the study. This acts as an illustration of the kind of cost assessment issues high-utilisation rate ICT services should consider when choosing between different infrastructure options. The research is co-funded by the European Commission Seventh Framework Programme through the e-FISCAL project (contract number RI-283449). 1. Introduction Assessing the actual costs of aggregate services consisting of multiple components from different sources is a difficult, but important task for several reasons. For example, the analysis forms the basis for assessing potential benefits of different outsourcing options and can help in managing pricing-related risks of Cloud-based services. The complexity stems from the need to take into account both capital and operational expenses (CAPEX and OPEX) of all of the components, which can vary based on local conditions and the actual level of use. Thus the apparent simplicity of the basic Cloud approach –only OPEX costs, “pay as you go” with a fixed unit price – often seems like an attractive, simple model. However, in reality Cloud pricing can include “CAPEX-like” components (such as billing for reserved instances) and other upfront costs cush as adapting applications to Cloud environments). Furthermore, as the volume of resource use grows, the premium pricing of the on-demand solutions may make them economically disadvantageous. We believe that in such a case any ICT service faces a similar challenge in finding the optimal mix of ICT infrastructure solutions as is currently faced by the European ICT services for research. Dedicated High Performance Computing (HPC) and High Throughput Computing (HTC) services provided by initiatives such as PRACE 1 and EGI 2 support a wide range of 1 Partnership for Advanced computing in Europe (http://www.prace-ri.eu/HPC-access).