Title: Provider Competition under variance based cloud pricing
Abstract: In cloud markets, users can rent any number of virtual machines (VM's) for as long they they need them. The number of VM's a user rents can be scaled up and down at any time. Payments typically only depend on the number of VM's currently used. The provider of the resource on the other hand has to always keep enough capacity in the same part of his system available to enable this scaling behavior. The providers marginal cost for renting capacity to a user therefore does not only depend on the number of rented VM's, but also on the user's scaling behavior. In this talk we will analyze the effect a pricing rule that includes payments based on the scaling behavior of the user, parameterized through its variance, has on a providers revenue under competition with other cloud providers.
