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Pricing cloud compute commodities: a novel financial economic model

conference contribution
posted on 2023-05-23, 09:11 authored by Sharma, B, Thulasiram, RK, Thulasiraman, P, Saurabh GargSaurabh Garg, Buyya, R
In this study, we design, develop, and simulate a cloud resources pricing model that satisfies two important constraints: the dynamic ability of the model to provide a high satisfaction guarantee measured as Quality of Service (QoS) - from users perspectives, profitability constraints - from the cloud service providers perspectives We employ financial option theory and treat the cloud resources as underlying assets to capture the realistic value of the cloud compute commodities (C3). We then price the cloud resources using our model. We discuss the results for four different metrics that we introduce to guarantee the quality of service and price as follows: (a) Moore's law based depreciation of asset values, (b) new technology based volatility measures in capturing price changes, (c) a new financial option pricing based model combining the above two concepts, and (d) the effect of age of resources and depreciation of cloud resource on QoS. We show that the cloud parameters can be mapped to financial economic model and we discuss the results of cloud compute commodity pricing for various parameters, such as the age of the resource, quality of service, and contract period.


Publication title

Proceedings of the 12th IEEE/ACM International Symposium on Cluster, Cloud and Grid Computing


P Balaji, R Buyya, S Majumdar, S Pandey






School of Information and Communication Technology


Institute of Electrical and Electronics Engineers

Place of publication

United States of America

Event title

12th IEEE/ACM International Symposium on Cluster, Cloud and Grid Computing

Event Venue

Ottowa, Canada

Date of Event (Start Date)


Date of Event (End Date)


Rights statement

Copyright 2012 IEEE

Repository Status

  • Restricted

Socio-economic Objectives

Information systems, technologies and services not elsewhere classified