In recent years, the adoption of Software as a Service (SaaS) cloud services has surpassed that of Infrastructure as a Service (IaaS) cloud service and is now the focus of attention in cloud computing. The cloud market is becoming highly competitive owing to the increasing number of cloud service providers (CSPs), who are likely to exhibit different cloud capacities, i.e., the cloud market is heterogeneous. Moreover, as different users generally exhibit different Quality of Service (QoS) preferences, it is challenging to set prices for cloud services of good QoS. In this study, we investigate the price competition in the heterogeneous cloud market where two SaaS providers, denoted by CSP1 and CSP2, lease virtual machine (VM) instances from IaaS providers to offer cloud-based application services to users. We assume that CSP1 only has M/M/1 queue of VM instances owing to its limited cloud resources, whereas CSP2 has M/M/∞ queue of VM instances reflecting its adequate resources. We consider two price competition scenarios in which two CSPs engage in two games: one is a noncooperative strategic game (NSG) where the two CSPs set prices simultaneously and the other is a Stackelberg game (SG) where CSP2 sets the price first as the leader and is followed by CSP1, who sets the price in response to CSP2. Each user decides which cloud services to purchase (if purchases are to be made) based on the prices and QoS. The NSG scenario corresponds to the practical cloud market, where two CSPs with different cloud capacities begin to offer cloud services simultaneously; meanwhile, the SG scenario covers the instance where a more recent CSP plans to enter a cloud market whose incumbent CSP has larger cloud resources. Equilibrium is achieved in each of the scenarios. Numerical results are presented to verify our theoretical analysis.
Xianwei LI
Waseda University
Bo GU
Kogakuin University
Cheng ZHANG
Waseda University
Zhi LIU
Shizuoka University
Kyoko YAMORI
Asahi University,Waseda University
Yoshiaki TANAKA
Waseda University
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Xianwei LI, Bo GU, Cheng ZHANG, Zhi LIU, Kyoko YAMORI, Yoshiaki TANAKA, "Optimal Pricing for Service Provision in Heterogeneous Cloud Market" in IEICE TRANSACTIONS on Communications,
vol. E102-B, no. 6, pp. 1148-1159, June 2019, doi: 10.1587/transcom.2018EBP3201.
Abstract: In recent years, the adoption of Software as a Service (SaaS) cloud services has surpassed that of Infrastructure as a Service (IaaS) cloud service and is now the focus of attention in cloud computing. The cloud market is becoming highly competitive owing to the increasing number of cloud service providers (CSPs), who are likely to exhibit different cloud capacities, i.e., the cloud market is heterogeneous. Moreover, as different users generally exhibit different Quality of Service (QoS) preferences, it is challenging to set prices for cloud services of good QoS. In this study, we investigate the price competition in the heterogeneous cloud market where two SaaS providers, denoted by CSP1 and CSP2, lease virtual machine (VM) instances from IaaS providers to offer cloud-based application services to users. We assume that CSP1 only has M/M/1 queue of VM instances owing to its limited cloud resources, whereas CSP2 has M/M/∞ queue of VM instances reflecting its adequate resources. We consider two price competition scenarios in which two CSPs engage in two games: one is a noncooperative strategic game (NSG) where the two CSPs set prices simultaneously and the other is a Stackelberg game (SG) where CSP2 sets the price first as the leader and is followed by CSP1, who sets the price in response to CSP2. Each user decides which cloud services to purchase (if purchases are to be made) based on the prices and QoS. The NSG scenario corresponds to the practical cloud market, where two CSPs with different cloud capacities begin to offer cloud services simultaneously; meanwhile, the SG scenario covers the instance where a more recent CSP plans to enter a cloud market whose incumbent CSP has larger cloud resources. Equilibrium is achieved in each of the scenarios. Numerical results are presented to verify our theoretical analysis.
URL: https://global.ieice.org/en_transactions/communications/10.1587/transcom.2018EBP3201/_p
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@ARTICLE{e102-b_6_1148,
author={Xianwei LI, Bo GU, Cheng ZHANG, Zhi LIU, Kyoko YAMORI, Yoshiaki TANAKA, },
journal={IEICE TRANSACTIONS on Communications},
title={Optimal Pricing for Service Provision in Heterogeneous Cloud Market},
year={2019},
volume={E102-B},
number={6},
pages={1148-1159},
abstract={In recent years, the adoption of Software as a Service (SaaS) cloud services has surpassed that of Infrastructure as a Service (IaaS) cloud service and is now the focus of attention in cloud computing. The cloud market is becoming highly competitive owing to the increasing number of cloud service providers (CSPs), who are likely to exhibit different cloud capacities, i.e., the cloud market is heterogeneous. Moreover, as different users generally exhibit different Quality of Service (QoS) preferences, it is challenging to set prices for cloud services of good QoS. In this study, we investigate the price competition in the heterogeneous cloud market where two SaaS providers, denoted by CSP1 and CSP2, lease virtual machine (VM) instances from IaaS providers to offer cloud-based application services to users. We assume that CSP1 only has M/M/1 queue of VM instances owing to its limited cloud resources, whereas CSP2 has M/M/∞ queue of VM instances reflecting its adequate resources. We consider two price competition scenarios in which two CSPs engage in two games: one is a noncooperative strategic game (NSG) where the two CSPs set prices simultaneously and the other is a Stackelberg game (SG) where CSP2 sets the price first as the leader and is followed by CSP1, who sets the price in response to CSP2. Each user decides which cloud services to purchase (if purchases are to be made) based on the prices and QoS. The NSG scenario corresponds to the practical cloud market, where two CSPs with different cloud capacities begin to offer cloud services simultaneously; meanwhile, the SG scenario covers the instance where a more recent CSP plans to enter a cloud market whose incumbent CSP has larger cloud resources. Equilibrium is achieved in each of the scenarios. Numerical results are presented to verify our theoretical analysis.},
keywords={},
doi={10.1587/transcom.2018EBP3201},
ISSN={1745-1345},
month={June},}
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TY - JOUR
TI - Optimal Pricing for Service Provision in Heterogeneous Cloud Market
T2 - IEICE TRANSACTIONS on Communications
SP - 1148
EP - 1159
AU - Xianwei LI
AU - Bo GU
AU - Cheng ZHANG
AU - Zhi LIU
AU - Kyoko YAMORI
AU - Yoshiaki TANAKA
PY - 2019
DO - 10.1587/transcom.2018EBP3201
JO - IEICE TRANSACTIONS on Communications
SN - 1745-1345
VL - E102-B
IS - 6
JA - IEICE TRANSACTIONS on Communications
Y1 - June 2019
AB - In recent years, the adoption of Software as a Service (SaaS) cloud services has surpassed that of Infrastructure as a Service (IaaS) cloud service and is now the focus of attention in cloud computing. The cloud market is becoming highly competitive owing to the increasing number of cloud service providers (CSPs), who are likely to exhibit different cloud capacities, i.e., the cloud market is heterogeneous. Moreover, as different users generally exhibit different Quality of Service (QoS) preferences, it is challenging to set prices for cloud services of good QoS. In this study, we investigate the price competition in the heterogeneous cloud market where two SaaS providers, denoted by CSP1 and CSP2, lease virtual machine (VM) instances from IaaS providers to offer cloud-based application services to users. We assume that CSP1 only has M/M/1 queue of VM instances owing to its limited cloud resources, whereas CSP2 has M/M/∞ queue of VM instances reflecting its adequate resources. We consider two price competition scenarios in which two CSPs engage in two games: one is a noncooperative strategic game (NSG) where the two CSPs set prices simultaneously and the other is a Stackelberg game (SG) where CSP2 sets the price first as the leader and is followed by CSP1, who sets the price in response to CSP2. Each user decides which cloud services to purchase (if purchases are to be made) based on the prices and QoS. The NSG scenario corresponds to the practical cloud market, where two CSPs with different cloud capacities begin to offer cloud services simultaneously; meanwhile, the SG scenario covers the instance where a more recent CSP plans to enter a cloud market whose incumbent CSP has larger cloud resources. Equilibrium is achieved in each of the scenarios. Numerical results are presented to verify our theoretical analysis.
ER -