IT teams spend on purchasing infrastructure from Vmware Cloud on AWS (VMC). Now they can transfer these expenses (CPU, Memory, and Storage) to the application teams using VMC cost allocation. The cost allocation mechanism lets you view the expenses related to the CPU, memory and storage for a single virtual machine (VM), this helps you to determine the overall cost associated with your cloud infrastructure.

To use the VMC costing feature you must set the Billing Enable option in Advance Settings section of a VMC adapter to true. If it is set to false, the costing is based on the reference cost.

VMC Costing - Points to Remember

  • The bill expenses or reference based costs are divided into CPU : memory : storage ratios, you can edit ratio, region, and discount from the Cost Settings for Financial Accounting Model topic.
  • The bill expenses are allocated to clusters based on the region to which the cluster belongs.
    Note: Some of the bill expenses (co-related to component resource objects in vRealize Operations ) are divided across all the clusters, since at present vRealize Operations does not have an understanding of all the types of expenses.
  • If the VMC bills currency format is different from vRealize Operations currency format, then the VMC bills are converted to vRealize Operations currency format and published on clusters and VMs. You can find the conversion factor as a property under VMC Organization resource objects.
  • The reference based costs that are picked are always on-demand. If you add VMC vCenter directly to vRealize Operations with the advanced settings of cloud type selected as VMware on AWS, then the reference costs of US east (N. Virginia) is picked by default.
The following are some important points to consider when you select reference based costing and bill based costing.

  • In case of reference based costing, we consider the Host as Production host and host type as On Demand, and get the base rates for cost Allocation. Even if the host type is Subscription based, we still do costing treating it as On Demand Host Type.

  • When you have some unconfigured SDDCs in the organization, vRealize Operations might not list all the hosts in the organization. So, if you use bill based costing which uses the list of hosts to calculate the cost, we might not be able to calculate the correct base rates.
  • Expenses from the bills of your VMware Cloud on AWS is distributed using a fair allocation algorithm to CPU, memory, and storage at the VM level. For accurate cost numbers, all the SDDCs must be configured in the given Organization.
  • Ability to carry out workload planning with VMware Cloud on AWS as the destination cloud using the new calculated base rates, based on your bills.

How Does VMC Cost Allocation Work

The VMC cost allocation works as per the following sequence of events defined in vRealize Operations .
  • Discover inventory of VMC using vCenter and VMC adapters.
  • Acquire bills for VMC from VMware Cloud Services Platform (CSP) using the VMC native adapter.
  • Identify the expenses per cluster using approximate values.
  • Using the Total Cost Value, determine CPU, Memory, and Storage base rates.
  • Apply base rates on VMs for allocation or utilization depending on the capacity model.