Optimal pricing strategies for Manufacturing-as-a Service platforms to ensure business sustainability

Manufacturing as a Service (MaaS) is a service which delivers manufactured products by connecting its network of suppliers with its customers on a digital platform. The long term sustainability of the MaaS platforms depends on their pricing strategy and whether they can generate sufficient volume from customers and encourage suppliers to do business with them. The objective of the paper is to develop optimal prices which a MaaS platform can charge to maximize its own profit as well as joint profit for itself and its supplier. Game theoretic models based on Hotelling's model are developed to determine the prices. We consider scenarios when the platform charges and does not charge subscription fees. We also determine conditions for the supplier to join the platform. Our models are motivated by real problems faced by a MaaS platform and have been validated using data provided by the platform. The models, the conditions developed and the insights obtained by validating the models using real data provide guidance to MaaS platforms to improve their business sustainability. The paper thus shows that MaaS platforms, when successfully designed, with appropriate pricing models can create an effective and economically sustainable business ecosystem

A Competition-based Pricing Strategy in Cloud Markets using Regret Minimization Techniques

Cloud computing as a fairly new commercial paradigm, widely investigated by different researchers, already has a great range of challenges. Pricing is a major problem in Cloud computing marketplace; as providers are competing to attract more customers without knowing the pricing policies of each other. To overcome this lack of knowledge, we model their competition by an incomplete-information game. Considering the issue, this work proposes a pricing policy related to the regret minimization algorithm and applies it to the considered incomplete-information game. Based on the competition based marketplace of the Cloud, providers update the distribution of their strategies using the experienced regret. The idea of iteratively applying the algorithm for updating probabilities of strategies causes the regret get minimized faster. The experimental results show much more increase in profits of the providers in comparison with other pricing policies. Besides, the efficiency of a variety of regret minimization techniques in a simulated marketplace of Cloud are discussed which have not been observed in the studied literature. Moreover, return on investment of providers in considered organizations is studied and promising results appeared

Game theory for cooperation in multi-access edge computing

Cooperative strategies amongst network players can improve network performance and spectrum utilization in future networking environments. Game Theory is very suitable for these emerging scenarios, since it models high-complex interactions among distributed decision makers. It also finds the more convenient management policies for the diverse players (e.g., content providers, cloud providers, edge providers, brokers, network providers, or users). These management policies optimize the performance of the overall network infrastructure with a fair utilization of their resources. This chapter discusses relevant theoretical models that enable cooperation amongst the players in distinct ways through, namely, pricing or reputation. In addition, the authors highlight open problems, such as the lack of proper models for dynamic and incomplete information scenarios. These upcoming scenarios are associated to computing and storage at the network edge, as well as, the deployment of large-scale IoT systems. The chapter finalizes by discussing a business model for future networks.info:eu-repo/semantics/acceptedVersio

Automated Bidding in Computing Service Markets. Strategies, Architectures, Protocols

This dissertation contributes to the research on Computational Mechanism Design by providing novel theoretical and software models - a novel bidding strategy called Q-Strategy, which automates bidding processes in imperfect information markets, a software framework for realizing agents and bidding strategies called BidGenerator and a communication protocol called MX/CS, for expressing and exchanging economic and technical information in a market-based scheduling system

Service provisioning problem in cloud and multi-cloud systems

Cloud computing is a new emerging paradigm that aims to streamline the on-demand provisioning of resources as services, providing end users with flexible and scalable services accessible through the Internet on a pay-per-use basis. Because modern cloud systems operate in an open and dynamic world characterized by continuous changes, the development of efficient resource provisioning policies for cloud-based services becomes increasingly challenging. This paper aims to study the hourly basis service provisioning problem through a generalized Nash game model. We take the perspective of Software as a Service (SaaS) providers that want to minimize the costs associated with the virtual machine instances allocated in a multiple Infrastructures as a Service (IaaS) scenario while avoiding incurring penalties for execution failures and providing quality of service guarantees. SaaS providers compete and bid for the use of infrastructural resources, whereas the IaaSs want to maximize their revenues obtained providing virtualized resources. We propose a solution algorithm based on the best-reply dynamics, which is suitable for a distributed implementation. We demonstrate the effectiveness of our approach by performing numerical tests, considering multiple workloads and system configurations. Results show that our algorithm is scalable and provides significant cost savings with respect to alternative methods (5% on average but up to 260% for individual SaaS providers). Furthermore, varying the number of IaaS providers means an 8%-15% cost savings can be achieved from the workload distribution on multiple IaaSs

Cloud Workload Allocation Approaches for Quality of Service Guarantee and Cybersecurity Risk Management

It has become a dominant trend in industry to adopt cloud computing --thanks to its unique advantages in flexibility, scalability, elasticity and cost efficiency -- for providing online cloud services over the Internet using large-scale data centers. In the meantime, the relentless increase in demand for affordable and high-quality cloud-based services, for individuals and businesses, has led to tremendously high power consumption and operating expense and thus has posed pressing challenges on cloud service providers in finding efficient resource allocation policies. Allowing several services or Virtual Machines (VMs) to commonly share the cloud\u27s infrastructure enables cloud providers to optimize resource usage, power consumption, and operating expense. However, servers sharing among users and VMs causes performance degradation and results in cybersecurity risks. Consequently, how to develop efficient and effective resource management policies to make the appropriate decisions to optimize the trade-offs among resource usage, service quality, and cybersecurity loss plays a vital role in the sustainable future of cloud computing. In this dissertation, we focus on cloud workload allocation problems for resource optimization subject to Quality of Service (QoS) guarantee and cybersecurity risk constraints. To facilitate our research, we first develop a cloud computing prototype that we utilize to empirically validate the performance of different proposed cloud resource management schemes under a close to practical, but also isolated and well-controlled, environment. We then focus our research on the resource management policies for real-time cloud services with QoS guarantee. Based on queuing model with reneging, we establish and formally prove a series of fundamental principles, between service timing characteristics and their resource demands, and based on which we develop several novel resource management algorithms that statically guarantee the QoS requirements for cloud users. We then study the problem of mitigating cybersecurity risk and loss in cloud data centers via cloud resource management. We employ game theory to model the VM-to-VM interdependent cybersecurity risks in cloud clusters. We then conduct a thorough analysis based on our game-theory-based model and develop several algorithms for cybersecurity risk management. Specifically, we start our cybersecurity research from a simple case with only two types of VMs and next extend it to a more general case with an arbitrary number of VM types. Our intensive numerical and experimental results show that our proposed algorithms can significantly outperform the existing methodologies for large-scale cloud data centers in terms of resource usage, cybersecurity loss, and computational effectiveness

Dynamic Pricing of Applications in Cloud Marketplaces using Game Theory

The competitive nature of Cloud marketplaces as new concerns in delivery of services makes the pricing policies a crucial task for firms. so that, pricing strategies has recently attracted many researchers. Since game theory can handle such competing well this concern is addressed by designing a normal form game between providers in current research. A committee is considered in which providers register for improving their competition based pricing policies. The functionality of game theory is applied to design dynamic pricing policies. The usage of the committee makes the game a complete information one, in which each player is aware of every others payoff functions. The players enhance their pricing policies to maximize their profits. The contribution of this paper is the quantitative modeling of Cloud marketplaces in form of a game to provide novel dynamic pricing strategies; the model is validated by proving the existence and the uniqueness of Nash equilibrium of the game