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Screening the Future 2012: Pause, Play, and Press Forward Los Angeles, May 21-23, 2012. Total Cost of Preservation Cost Modeling for Sustainable Services. Stephen Abrams Patricia Cruse John Kunze University of California Curation Center California Digital Library. Goals. - PowerPoint PPT Presentation
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Total Cost of PreservationCost Modeling for Sustainable Services
Stephen AbramsPatricia Cruse
John KunzeUniversity of California Curation Center
California Digital Library
Screening the Future 2012: Pause, Play, and Press ForwardLos Angeles, May 21-23, 2012
Goals Understand costs in order to plan for and implement
sustainable preservation services Investigate the possibility of paid-up pricing in order
to address► Boom-or-bust budget cycles► Fixed-term, grant funded projects
Source: www.sharedidiz.com/
Final
report
Meeting the expectation Corner store
► Fry’s ≤ $ 100/TB
Commercial cloud► Amazon $1,000/TB/year► Apple $2,000/TB/year► Dropbox $1,980/TB/year► Google $1,200/TB/year► Microsoft $ 500/TB/year
Preservation repository► Princeton DataSpace $6,000/TB for “forever”► USC Digital Repository $1,000/TB for 20 years
Prior work Nationaal Archief (2005)
http://www.nationaalarchief.nl/sites/default/files/docs/kennisbank/codpv1.pdf
LIFE (2008)http://www.life.ac.uk/
KRDS (2010)http://www.beagrie.com/krds.php
DataSpace (2010)http://arks.princeton.edu/ark:/88435/dsp01w6634361k
Jean-Daniel Zeller (2010)“Cost of digital archiving: Is there a universal model?”8th European Conference on Digital Archiving, Geneva, April 28-30, 2010 http://regarddejanus.files.wordpress.com/2010/05/costsdigitalarchiving-_jdz_eca2010.pdf
Rosenthal (2011)http://blog.dshr.org/2011/09/modeling-economics-of-long-term-storage.html
}Identification of granular cost components
}Assumption of annual decrease in aggregate cost, i.e., discounted cash flow (DCF)
Critique of DCF approach
Cost model components
System, composed of various Services providing curation function, running on Servers, deployed by Staff, in support of content Producers, who use Workflows to submit instances of Content Types, which occupy Storage, and are subject to ongoing Monitoring and periodic Interventions; all subject to managerial Oversight
Number and unit cost of Producers
Total cost of preservation
OViMjSkCWmPnATCP
Fixed cost of System
Number and unit cost of Workflows
Unit cost and number of
Content Types
Number and unit cost of
Storage
Number and unit cost of Monitoring
Number and unit cost of
Interventions
System component subsumes Services
and Servers
Staff costs are subsumed by other
components
Total cost to service
provider
Fixed cost of oversight
Cost to a single producer Cost of the Archive, Workflows, Content Types,
Monitoring, and Interventions are “common goods”► Equally beneficial to all Providers► Properly apportioned across all Providers
SkPn
OViMjCWmAG P
Number of Storage units attributable to
Producer
Number of Producers
Unit cost of a Producer
Total cost attributable to a given Producer
Price models Pay-as-you go pricing
► Annual billing cycle► Price = cost of providing curation service to a given Producer► Only viable if Producers have predictable and reliable
sources of funding● Any interruption in funding, and therefore service, may result in
irretrievable data loss
Paid-up pricing► Assumption of an annual decrease, d, in aggregate service
cost, and investment return, r● In economic terms, this is a Discounted Cash Flow (DCF) or Net
Present Value (NPV) model
Pricing over time
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
$16,000$14,000$12,000$10,000$ 8,000$ 6,000$ 4,000$ 2,000$ 0
Year (T)
Cost
($)
(1–d)t discount factor
Discounted pay-as-you-goG (T,d )Discounted pay-as-you-goG (,d )
Cumulative pay-as-you-goG (T )
dd T
GdTG 11),(TGTG )(
Pricing over time
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
$16,000$14,000$12,000$10,000$ 8,000$ 6,000$ 4,000$ 2,000$ 0
Year (T)
Cost
($)
)()1()1()1(),,(drrdr
T
TT
GrdTF
(1–d)t discount factor
(1+r)t investment return
Paid-up price, for TF (T,d ,r)Paid-up price, for F (,d ,r)
Discounted pay-as-you-goG (T,d )Discounted pay-as-you-goG (,d )
Cumulative pay-as-you-goG (T )
Predicting the future is hard TCP modeling is dependent on the predictive
reliability of d and r
www.flickr.com/photos/mcgraths/3248483447
Predicting the future is hard Model the risk
► Add a risk premium to the modeling equations
Recalibrate the model► Periodically reset the values of d and r (and G andF ),
based on contemporary conditions, to be applied prospectively
Bound the uncertainty► Stochastic modeling to determine the probability
distribution of possible outcomes
Hybrid price model Distinguish between costs that are (relatively) easy
to quantify and forecast, and those that aren’t► Use the paid-up model for the former and pay-as-you-go
for the latter
Easy Difficult
Archive Intervention
Producer
Workflow
Content Type
Monitoring
Storage
Hybrid price model Distinguish between costs that are (relatively) easy
to quantify and forecast, and those that aren’t► Use the paid-up model for the former and pay-as-you-go
for the latter
Easy Difficult
Archive Content Type
Producer Workflow
Storage Monitoring
Intervention
Preservation forever Some things are intended to last forever…
Source: John Church Company Source: United Artists
Preservation forever
?
Some things are intended to last forever…
Preservation for … A fixed term – 10 years? 20 years? – may be
appropriate for much content► Give content an opportunity to prove its worth, as
evidenced by someone’s commitment to pay for its subsequent preservation
Transparency and opportunity Possible outcomes…
► We overestimate our costs and collect too much● Fund a higher level of service● Refund some portion
► We underestimate● Ask for additional funds● Lower service levels● De-accession content – but at least it was preserved up to that
point and had a chance to prove its value, and gain an advocate
Conclusions Different customers have different funding capabilities
► Flexibility in price models is important
Any price model is based on an idealization of the real world► Assumptions matter
Understanding all of your costs is a precondition to a policy decision to recover all or part of those costs► Cost accounting is difficult
If investment return and discount factor can be reliably projected, DCF can be used to model of long-term costs► What if not?
Conclusions Even if we don’t have a perfect model, we need to
move forward now with a “good enough” model
Source: Getty Images
For more information
Total Cost of Preservation: Cost Modeling for Sustainable Serviceshttp://wiki.ucop.edu/display/Curation/Cost+Modeling
UC Curation Centerhttp://www.cdlib.org/[email protected]
Stephen Abrams Mark ReyesPatricia Cruse Abhishek SalveScott Fisher Joan StarrErik Hetzner Tracy SenecaGreg Janée Carly StrasserJohn Kunze Marisa StrongMargaret Low Adrian TurnerDavid Loy Perry Willett
Source: Getty Images