Pricing Cloud Bandwidth Reservations Under Demand Uncertainty
In a public cloud, bandwidth is traditionally priced in a pay-as-you-go model. Reflecting the recent trend of augmenting cloud computing with bandwidth guarantees, the authors consider a novel model of cloud bandwidth allocation and pricing when explicit bandwidth reservation is enabled. They argue that a tenant's utility depends not only on its bandwidth usage, but more importantly on the portion of its demand that is satisfied with a performance guarantee. Their objective is to determine the optimal policy for pricing cloud bandwidth reservations, in order to maximize social welfare, i.e., the sum of the expected profits that can be made by all tenants and the cloud provider, even with the presence of demand uncertainty.