Socially optimal pricing of cloud computing resources

Authors:
Ishai Menache;Asuman Ozdaglar;Nahum Shimkin
Affiliations:
Microsoft Research New England, Cambridge, MA;Laboratory for Information and Decision Systems, Massachusetts Institute of Technology, Cambridge, MA;Technion --- Israel Institute of Technology, Haifa, Israel
Venue:
Proceedings of the 5th International ICST Conference on Performance Evaluation Methodologies and Tools
Year:
2011

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Abstract

The cloud computing paradigm offers easily accessible computing resources of variable size and capabilities. We consider a cloud-computing facility that provides simultaneous service to a heterogeneous, time-varying population of users, each associated with a distinct job. Both the completion time, as well as the user's utility, may depend on the amount of computing resources applied to the job. In this paper, we focus on the objective of maximizing the long-term social surplus, which comprises of the aggregate utility of executed jobs minus load-dependent operating expenses. Our problem formulation relies on basic notions of welfare economics, augmented by relevant queueing aspects. We first analyze the centralized setting, where an omniscient controller may regulate admission and resource allocation to each arriving job based on its individual type. Under appropriate convexity assumptions on the operating costs and individual utilities, we establish existence and uniqueness of the social optimum. We proceed to show that the social optimum may be induced by a single per-unit price, which charges a fixed amount per unit time and resource from all users.