Section: New Results
The economics of the cloud: price competition and congestion
Participants : Jonatha Anselmi, Danilo Ardagna, Jonh C.s. Lui, Adam Wierman, Yunjian Xu, Zichao Yang.
This work proposes a model to study the interaction of price competition and congestion in the cloud computing marketplace. Specifically, we propose a three-tier market model that captures a marketplace with users purchasing services from Software-as-Service (SaaS) providers, which in turn purchase computing resources from either Provider-as-a-Service (PaaS) providers or Infrastructure-as-a-Service (IaaS) providers. Within each level, we define and characterize competitive equilibria. Further, we use these characterizations to understand the relative profitability of SaaSs and PaaSs/IaaSs, and to understand the impact of price competition on the user experienced performance, i.e., the `price of anarchy' of the cloud marketplace. Our results highlight that both of these depend fundamentally on the degree to which congestion results from shared or dedicated resources in the cloud. This work has been submitted to an international journal. A preliminary has been published in  .