Maximizing Utility for Content Delivery Clouds
WISE '09 Proceedings of the 10th International Conference on Web Information Systems Engineering
Platform-based information goods: The economics of exclusivity
Decision Support Systems
Net Neutrality and Vertical Integration of Content and Broadband Services
Journal of Management Information Systems
Pricing and Resource Allocation in a Cloud Computing Market
CCGRID '12 Proceedings of the 2012 12th IEEE/ACM International Symposium on Cluster, Cloud and Grid Computing (ccgrid 2012)
Cooperative Cashing? An Economic Analysis of Document Duplication in Cooperative Web Caching
Information Systems Research
Content Provision Strategies in the Presence of Content Piracy
Information Systems Research
ISP vs. ISP+CDN: can ISPs in duopoly profit by introducing CDN services?
ACM SIGMETRICS Performance Evaluation Review
Execution Risk in High-Frequency Arbitrage
Management Science
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Content delivery networks (CDNs) are a vital component of the Internet's content delivery value chain, servicing nearly a third of the Internet's most popular content sites. However, in spite of their strategic importance, little is known about the optimal pricing policies or adoption drivers of CDNs. We address these questions using analytic models of CDN pricing and adoption under Markovian traffic and extend the results to bursty traffic using numerical simulations. When traffic is Markovian, we find that CDNs should provide volume discounts to content providers. In addition, the optimal pricing policy entails lower emphasis on value-based pricing and greater emphasis on cost-based pricing as the relative density of content providers with high outsourcing costs increases. However, when traffic is bursty and content providers have varying levels of traffic burstiness, volume discounts may be suboptimal and may even be replaced by volume taxes. Finally, when there is heterogeneity in burstiness across content providers, a pricing policy that accounts for both the mean and variance in traffic such as percentile-based pricing is more profitable than traditional volume-based pricing (metering bytes delivered in a given time window). This finding is in contrast to the current practices of many CDN firms that use traditional volume-based pricing.