Service Agreement Trifecta: Backup Resources, Price and Penalty in the Availability-Aware Cloud
Authors: Yuan, Shuai; Das, Sanjukta; Ramesh, R.; Qiao, Chunming
Journal: Information Systems Research (2018)
Service Level Agreements (SLA) for cloud services entail complex trade-offs between interrelated variables such as price, penalty, and service availability (uptime) guarantee, with resource management strategies affecting fulfillment of the SLA. In this study, we address three key components of the SLA-based cloud resource management and pricing problem, from the service-provider’s perspective: (1) availability-aware backup resource provisioning; (2) price-penalty schedule determination; and (3) penalty-deferred pricing over two periods. Using the convexity of the provider’s expected total cost over the number of backup resources, we present a dichotomous search algorithm to derive the total cost minimizing number of backup resources for a given level of SLA-specified service availability guarantee. Next, we derive closed-form solutions for the lower bound of the feasible price range, yielding a schedule of breakeven price-penalty combinations, which establishes the baseline required in the economic modeling of the service contracts and related negotiation processes, and may also elicit client preference information. We then model a two-period pricing problem specifically designed…