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One of the major benefits of cloud computing is the ability for users to access resources on a pay-as-you go basis, thereby potentially reducing their costs and enabling them to scale applications rapidly. However, this approach does not necessarily benefit the provider. Providers have the responsibility of ensuring that they have the physical infrastructure to meet their users' demand and that their performance meets agreed service level agreements. Without an accurate view of future demand, planning for variable costs such as staff, replacement servers or coolers, and electricity supplies, can all be very difficult, and optimizing the distribution of virtual machines presents a major challenge.
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