New metering and billing systems from Hewlett-Packard (HP) enable the company to charge its On Demand Solutions customers for the exact percentage of a CPU (central processing unit) they are using, HP announced Tuesday.
The systems support a new billing option for customers of its On Demand Solutions program. Called "Pay Per Use Percent CPU," the new pricing plan accurately tracks a customer's consumption of processing power for each CPU on its high-end Superdome Unix servers, billing them only for what they use.
HP deploys specially configured ProLiant servers running the new metering software in customer data centers to support the new billing plan, according to Irv Rothman, president and chief executive officer of HP Financial Services.
Customers' exact CPU utilization is collected, encrypted, and transmitted to a new back-end billing system maintained by HP. HPs billing system then calculates the percentage of CPU capacity used to perform a particular task at a point in time. That information is aggregated by HP and sent to customers in a bill each week, Rothman said.
Under existing pricing plans, HP customers might pay a flat monthly fee, or pay based on whether one or more Superdome processors were used to complete a task. Those plans do not bill based on how much processing power was used, Rothman said
In contrast, the Pay Per Use Percent CPU plan bills customers for using processing power in the same way the electric company bills them for using electricity, according to Rothman.
"It's literally the same as a light switch. If (the processor) is on you get charged, if it's off, you don't," Rothman said.
Companies will save money during slack times, better preserving resources to help cover surges in demand, HP said. Because actual processor use is being accurately tracked and billed, HP can also ensure that customers receive increased capacity as they need it.
Surges in demand will be automatically met by additional processors on the Superdome servers. The increased cost of that capacity to customers will be offset by the increased demand for its services, HP said.
Customers must guarantee a base level of 25 percent CPU utilization. Customers using 100 percent of their available processing power will find they are paying about what they would with a standard HP lease, Rothman said.
The result is that most companies will find the new pricing system offers significant savings.
"Between 25 percent and 100 percent, there's a whole range of opportunities for customer to lower their costs and increase their return on investment," Rothman said.
Existing On Demand Solutions customers will have the option of switching to the new Pay Per Use Percent CPU plan, choosing from a number of other plans, or doing nothing.
While he acknowledged that the new pricing plan may result in lower revenue from On Demand Solutions customers in the short term, Rothman said the company hopes to make up for that shortfall with new accounts and expanded business from its existing customers.
Pay-per-use is already available to most HP customers worldwide, though the service is not yet available for customers in Asia and Latin America, HP said.