Academic Fee Structure

Ohio Academic Fee Structure

Overview and Background

What is the OSC academic fee structure?

The academic fee structure is a mechanism under which academic institutions whose researchers constitute the majority of OSC’s clients pay a fee based upon actual usage of resources. The fee is established to meet a specific funding target and is significantly less (roughly 10% of total cost) than the actual costs OSC incurs to provide these services.

Why did OSC need to put an academic fee structure in place?

Sustainability for research computing on campuses is a national concern. For the first 30 years of OSC's existence, OSC provided Ohio academic researchers with fully subsidized services, subject to peer review. However, despite significant efforts to constrain costs in recent years, OSC faces funding shortfalls that require additional revenue to ensure core services continue at current levels. Limited fees will allow OSC to continue to support research in Ohio and provide a good return on the state's central investment.

Where does OSC funding come from?

Since its establishment more than 30 years ago, state funding for OSC has been made through a separate line item in the biannual state operating budget, directed through the Department of Higher Education. All state capital and operating appropriations in Ohio are considered public information and is available through the Legislative Service Commission website ( A small fraction of OSC’s funding also comes directly from client fees (such as commercial clients and academic condo purchasers), as well as from sponsored research awards. It has been asked whether OSC’s line item is part of the State Share of Instruction (SSI) through DHE, which is the large line item that supports Ohio’s higher education institutions. OSC funding is separate line item and is not associated, at all, with the SSI or the SSI formula.

What was the timeline for the creation of the fee structure model?

  • In 2014, OSC data center rent and power charges, which historically were paid for by another State of Ohio department, were transferred to OSC’s budget responsibility, along with a one time budget allocation increase.
  • In the summer of 2016, OSC began projecting significant operating deficits for 2017 and beyond, and began a series of cost reduction measures.
  • In the fall of 2016, OSC and stakeholders at the Ohio Department of Higher Education began developing and analyzing several potential fee structure models to close the funding gap.
  • In the summer of 2017, OSC unexpectedly received a 10% budget reduction from the state appropriation.  In addition, the ODHE Chancellor held meetings with the Provosts of the 6 biggest client institutions to begin discussions on potential fee models.
  • In the fall of 2017, OSC presented the initial proposed fee model to clients via various channels, including a presentation at the biannual SUG meeting.
  • In late 2017 and early 2018, OSC and administrative representatives from the 6 biggest client institutions revised the fee model based upon stakeholder feedback.
  • In the summer of 2018, OSC established contracts with each of the 6 biggest institutions and implemented the fee model.

Who agreed to this fee structure model?

OSC staff members began discussing the new academic fee structure model in 2016 with ODHE officials, who have been actively involved, and steered many of these discussions. OSC and ODHE had considered various other mechanisms to address OSC’s funding gap, each of which were deemed not as workable. Administrators from the six universities representing about 90 percent of OSC’s resource usage signed the final agreements. OSC has formed an ongoing Finance Committee with representatives from the six universities who are kept abreast of the financial health of the center as well as jointly working to refine the model for charging for compute usage and/or additional services for FY20 and beyond.

Has OSC been sharing the details of its finances?

OSC regularly details its financials—projected revenue and expenses, reserves and surplus strategies—with the OSC-OARnet Advisory Board, the SUG Executive Committee and the Finance Committee (designated officials from the impacted universities).

Why should the universities contribute to OSC’s funding?

OSC provides value to Ohio universities in the form of a significant state investment ($18 million in capital funding and $16 million in operating funding over last four years) that centralizes specialized services, which expands access, improves quality and lowers cost. This central investment improves the competitiveness of academic programs and the ability to recruit and retain faculty members across the state.

OSC provides value to Ohio faculty members by offering services that allow them to easily test and scale computing to meet their needs while avoiding lengthy and costly IT-infrastructure investments. When compared to local installations and cloud alternatives, OSC provides the lowest cost option in addition to providing the best service for Ohio.

Business and Financial Details

What are the specific fees under this model?

In FY19 (starting July 1, 2018), the first 10,000 resource units per project are fully subsidized, while compute usage over 10,000 resource units will be charged at a rate of $0.075 per resource units. Resource units (RUs) equal 10 core hours of compute usage on the Pitzer and Owens Clusters and 20 core hours on the Ruby Cluster. There is no charge for usage of storage. The rates for FY20 (starting July 1, 2019) will remain the same.

Who are the parties to the agreements?

Universities under contract—those with the highest historical usage thresholds—have signed Memoranda of Understanding in place with OSC for usage. As of July 1, 2018, OSC has entered into an agreement with six universities (Akron, BGSU, Case, UC, OU, OSU). Decisions on whether or not to forward charges to faculty or departments are left up to each institution. OSC will not establish agreements with individual faculty members under this fee structure. Faculty and researchers that need specialized services, such as “condo nodes,” can continue to contract directly with OSC under a separate rate mechanism. Such usage and resources are outside the scope of the academic fee structure.

Does everyone have the same deal?

At the insistence of the six universities currently under contract, each are being charged the same per/RU rate under the new model and are given the same first-10,000 subsidy-free RUs per project. In order to avoid collecting more than the required funding target, OSC capped Ohio State University’s total bill for the FY19 year, as Ohio State is projected to provide three-quarters of all collected academic fees under the new model.

OSC staff members are monitoring usage of other universities, and if they approach an annual bill of more than $5,000, OSC will negotiate an agreement with that institution using the same rate terms as for the six universities already under contract.

How were the fee rates established?

The rates to be charged under the new academic fee structure model were calculated based upon projected operating deficits for FY19 which were estimated to be about $1M. An analysis was performed to calculate how many resources each project used in FY18 (July 1, 2017 – June 30, 2018). Various models were evaluated under which a certain initial threshold of usage incurred no charges, while usage above the threshold was charged a fee. A threshold of 10,000 RUs was determined to be optimal based upon number of impacted projects and corresponding fees relative to commercial provider pricings. These rates represent about a tenth of OSC’s actual costs per RU and a small fraction of the prices from popular cloud venders or dedicated hardware installations.

Client-specific Details

Are any clients exempt from the fee structure?

Certain groups of OSC clients are exempt from the FY19 fee model:

  • Commercial clients, who pay separate fees
  • Classroom projects, which remain available at no cost
  • Condo clients, who pay separate fees
  • Academic clients at institutions that are projected to incur less than $5,000 in annual fees

What is the impact on commercial and non-Ohio-based academic clients?

The academic fee structure has no direct impact on other clients or the rates they are charged. Clients that are NOT based at Ohio academic institutions account for about 10 percent of usage of OSC resources, and income derived from their usage helps fund the Center’s operating budget. While OSC charges them rates significantly higher than those charged to Ohio-based academic clients, OSC strives to keep its pricing competitive in the market.

What about existing allocation awards?

The allocation does not generate fees; the compute usage of OSC services does. An allocation is awarded to a project by the SUG Allocations Committee. The purpose of the SUG Allocation Committee has always been to ensure equitable distribution of limited resources. The balance of the allocation award (RUs granted to the project) dictates when a new application needs to be submitted. This allocation is the balance that can be seen by clients at

The usage under that award (on the primary investigator’s project) will be billed for anything over 10,000 RUs in that fiscal year. Each fiscal year, the usage balance will be wiped clean. The allocation award will remain, and the balance will reflect the usage through the life of the award, not just during the current fiscal year. In all discussions regarding the new fee model, OSC has made clear that the FY19 fee model will apply to all existing allocations.

Where can clients find additional information?

Faculty at the six universities under contract (Akron, BGSU, Case, UC, OU, OSU) should contact their local administrative representative (listed below). Faculty members at other institutions can contact OSC Help directly for assistance.