Service models and pricing schemes for cloud computing

Cloud computing is a model for enabling convenient, on-demand network access to a shared pool of configurable computing resources. To ensure large-scale adoption of cloud computing by businesses, several challenges including security, privacy, trust, performance and other quality attributes need to be addressed. Also, as with other utility services, adequate selection of service models and pricing schemes by service providers plays a pivotal role in market expansion. This paper investigates optimal pricing schemes for cloud services. In particular, this paper analyzes two pricing schemes: subscription and pay-per-use pricing models from a provider's standpoint. Using a theoretical analysis of a simple economic model this paper analyzes the optimal choices of providers and discusses implications on consumer surplus and social welfare.