Pricing Cloud Computing Services

13^th October 2016, 13:00 Ashton Lecture Theater
Prof. Nicola Dimitri
Università degli Studi di Siena
Piazza San Francesco,
7/8 53100 Siena

Abstract

The economics of cloud computing has recently attracted increasing attention. In particular, a subject which is currently under debate is how prices charged to customers for cloud use are formed, as alternative pricing rules could be considered. Based on the three pricing schemes used by Amazon, the main global cloud service provider, in the paper we consider two main issues. First we present a methodology for the relevant parameters of the pricing rules to be determined in an optimal way, that is maximising the provider revenue. Then, based on this analysis we discuss reasons for co-existence of three, rather than fewer pricing rules for accessing the cloud. Our findings seem to suggest that this is due to a larger coverage of potential demand for service, as well as to the possibility for the provider to infer useful information on the customers willingness to pay for cloud services.