A Novel Approach to Dynamic Pricing for Cloud Computing Through Price Band Prediction

Abstract

Cloud computing emerges as a boon to business enterprises that offers increased productivity, economic efficiency and least operational and maintenance costs. The cost for the services offered is variable and dependent on market trends. The pricing model for cloud services are pay-per-use or subscription based as required circumstantially. With more and more provisions created for growing demands of resources, the pricing models are metering the requirements and are constantly moderating to provide optimal prices for services yet keeping best revenue schemes. To deliver business value to customers with QoS considerations within limits of infrastructure that they have, a price-wise categorization is required. In addition to this, the operational cost as well as infrastructure cost for cloud providers will differ insignificantly based-on whether one consumer or multiple consumers are serviced. The subscription model to service provisioning by the provider end is fueled up with discounts, price-cuts, offers and benefits to lure the customers thereby maximizing their resource utilization implicitly. Therefore, in order to grab the opportunity created by this competitive environment, we propose a dynamic pricing model for cloud brokers. In the existing cases of unexpected costs due to resource constraints going towards higher extremities, our model evaluates a price band for the customer’s transparency in cost and optimizes it. The benefits of the proposed pricing model is two fold. It provides the assurance about the maximum price that will be charged to the consumer while enjoying the existing benefits of dynamic pricing model; the price range calculation is an estimation done on the basis of resources requested, price history, current price, and risk premium are the decisive factors for our estimation rule. A fair proposition of resource allocation with maximal resource utilization, due returns for investments and an effective cost offering for the services is the aim of our work.