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-yougo 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, we 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. We show that optimal periodic auctions must follow the design of m+1-price auction with seller’s reservation price. Theoretical analysis also suggests the connections between periodic auctions and ...

• Type: Journal
• Year: 2012
• Where: ICDCS
• Authors: Wei Wang, Baochun Li, Ben Liang
• Keywords: Amazon EC2, Distributed And Parallel Computing, Dynamic Programming Solution, ICDCS 2012, Markov Decision Process