Towards Optimal Capacity Segmentation With Hybrid Cloud Pricing
Cloud resources are usually priced in multiple markets with different service guarantees. For example, Amazon EC2 prices virtual instances under three pricing schemes - the subscription option (a.k.a., Reserved Instances), the pay-as-you-go offer (a.k.a., On-Demand Instances), and an auction-like spot market (a.k.a., Spot Instances) - simultaneously. There arises a new problem of capacity segmentation: how can a provider allocate resources to different categories of pricing schemes, so that the total revenue is maximized? In this paper, the authors consider an EC2-like pricing scheme with traditional pay-as-you-go pricing augmented by an auction market, where bidders periodically bid for resources and can use the instances for as long as they wish, until the clearing price exceeds their bids.