Volume -I , Issue -VI, August 2014

USING SIMULATION MODELING FOR IT COST ANALYSIS

Farhan Akthar, Syed Amer Ali , Shiva Prasad Padigala and Bommidi Bhaskar

In the old days, the price for IT services was formed in a pretty standardized way. Network services had an explicit usage price per Kbit/ sec. The range of provided IT services have been growing very fast and have reached new dimensions of complexity. From infrastructure pricing to web-enabled application availability and performance nowadays the old rules for defining service pricing is not applicable any more. Today it is difficult or sometime even impossible to associate the provided service levels with the cost related to the processes of operation, maintenance and the capital cost behind it. The old measures of dollars per Kbit/sec cannot be the right measure any more. For example setting the price for one transaction per second does not define at all what is needed to perform two transactions per second. What should be a penalty in the case of breaking SLAs? Where is the golden mean here? How can it be found?

Simulation Modeling , IT Cost Analysis , pretty standardized

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