A Pricing Information Service for Grid Computing

This paper addresses two shortcomings that exist in the area of pricing Grid services in an economic Grid environment. The first shortcoming is that there are no standards for pricing schemes, caused by a large difference in the units that are traded (e.g. CPU cycles or virtual clusters) in Grid computing. The second shortcoming is the lack of a model for managing the pricing of informational elements (e.g. software applications) and computational elements (e.g. virtual machines, which comprise resources such as CPU, memory, disk space, network bandwidth). This paper presents a pricing service for Grid computing services, which resolves the shortcomings by introducing a general pricing scheme for informational and computational elements. We describe the functional requirements, architecture, and the interfaces of the pricing service. The pricing service allows expressing the proposed general pricing scheme as an XML document, which can be linked to service level agreements. Contrary to other proposals on pricing, the pricing service is separated from the functionality of metering, accounting, and payment. To validate the concept of a pricing information service, we portray two Utility Computing scenarios

Financial Derivatives Market for Grid Computing

This Master thesis studies the feasibility and properties of a financial derivatives market on Grid computing, a service for sharing computing resources over a network such as the Internet. For the European Organization for Nuclear Research (CERN) to perform research with the world's largest and most complex machine, the Large Hadron Collider (LHC), Grid computing was developed to handle the information created. In accordance with the mandate of CERN Technology Transfer (TT) group, this thesis is a part of CERN's dissemination of the Grid technology. The thesis gives a brief overview of the use of the Grid technology and where it is heading. IT trend analysts and large-scale IT vendors see this technology as key in transforming the world of IT. They predict that in a matter of years, IT will be bought as a service, instead of a good. Commoditization of IT, delivered as a service, is a paradigm shift that will have a broad impact on all parts of the IT market, as well as on the society as a whole. Political, economic and physical factors advocate a market for standardized computing resources supplied by multiple professional providers, benefiting from economies of scale. We argue for the trade of Virtual Servers as the standardized bundle of computer resources. Continuous trade of homogeneous resources allows for scheduling market efficiency and liquidity, but may entail a risk of erratic, unpredictable prices. We therefor e construct a complete, coherent Grid economy, consisting of both a spot market and a derivatives market. While the spot market is the trading place for the computer resources, the derivatives market aims to disperse the risk among those who are willing to invest in it. Because the Virtual Servers are non-storable assets, normal arbitrage theory cannot be used to price derivatives contracts. We propose to solve this issue by creating storable swap contracts priced by an auction-based market, where we argue that the price process follows a geometric Brownian motion. Taking into account the absence of arbitrage in the swap market and the requirement for a complete market, we offer a theoretical framework for martingale pricing and hedging of derivatives written on swaps

Pricing Digital Goods: Discontinuous Costs and Shared Infrastructure

We develop and analyze a model of pricing for digital products with discontinuous supply functions. This characterizes a number of information technology-based products and services for which variable increases in demand are fulfilled by the addition of 'blocks' of computing or network infrastructure. Examples include internet service, telephony, online trading, on-demand software, digital music, streamed video-on-demand and grid computing. These goods are often modeled as information goods with variable costs of zero, although their actual cost structure features a mixture of positive periodic fixed costs, and zero marginal costs. The pricing of such goods is further complicated by the fact that rapid advances in semiconductor and networking technology lead to sustained rapid declines in the cost of new infrastructure over time. Furthermore, this infrastructure is often shared across multiple goods and services in distinct markets. The main contribution of this paper is a general solution for the optimal nonlinear pricing of such digital goods and services. We show that this can be formulated as a finite series of more conventional constrained pricing problems. We then establish that the optimal nonlinear pricing schedule with discontinuous supply functions coincides with the solution to one specific constrained problem, reduce the former to a problem of identifying the optimal number of 'blocks' of demand that the seller will fulfil under their optimal pricing schedule, and show how to identify this optimal number using a simple and intuitive rule (which is analogous to 'balancing' the marginal revenue with average 'marginal cost'). We discuss the extent to which using 'information-goods' pricing schedules rather than those that are optimal reduce profits for sellers of digital goods. A first extension includes the rapidly declining infrastructure costs associated with Moore's Law to provide insight into the relationship between the magnitude of cost declines, infrastructure planning and pricing strategy. A second extension examines multi-market pricing of a set of digital goods and services whose supply is fulfilled by a shared infrastructure. Our paper provides a new pricing model which is widely applicable to IT, network and electronic commerce products. It also makes an independent contribution to the theory of second-degree price discrimination, by providing the first solution of monopoly screening when costs are discontinuous, and when costs incurred can only be associated with the total demand fulfilled, rather than demand from individual customers.We develop and analyze a model of pricing for digital products with discontinuous supply functions. This characterizes a number of information technology-based products and services for which variable increases in demand are fulfilled by the addition of 'blocks' of computing or network infrastructure. Examples include internet service, telephony, online trading, on-demand software, digital music, streamed video-on-demand and grid computing. These goods are often modeled as information goods with variable costs of zero, although their actual cost structure features a mixture of positive periodic fixed costs, and zero marginal costs. The pricing of such goods is further complicated by the fact that rapid advances in semiconductor and networking technology lead to sustained rapid declines in the cost of new infrastructure over time. Furthermore, this infrastructure is often shared across multiple goods and services in distinct markets. The main contribution of this paper is a general solution for the optimal nonlinear pricing of such digital goods and services. We show that this can be formulated as a finite series of more conventional constrained pricing problems. We then establish that the optimal nonlinear pricing schedule with discontinuous supply functions coincides with the solution to one specific constrained problem, reduce the former to a problem of identifying the optimal number of 'locks' of demand that the seller will fulfil under their optimal pricing schedule, and show how to identify this optimal number using a simple and intuitive rule (which is analogous to 'balancing' the marginal revenue with average 'marginal cost'). We discuss the extent to which using 'information-goods' pricing schedules rather than those that are optimal reduce profits for sellers of digital goods. A first extension includes the rapidly declining infrastructure costs associated with Moore's Law to provide insight into the relationship between the magnitude of cost declines, infrastructure planning and pricing strategy. A second extension examines multi-market pricing of a set of digital goods and services whose supply is fulfilled by a shared infrastructure. Our paper provides a new pricing model which is widely applicable to IT, network and electronic commerce products. It also makes an independent contribution to the theory of second-degree price discrimination, by providing the first solution of monopoly screening when costs are discontinuous, and when costs incurred can only be associated with the total demand fulfilled, rather than demand from individual customers

Business Integration as a Service

This paper presents Business Integration as a Service (BIaS) which enables connections between services operating in the Cloud. BIaS integrates different services and business activities to achieve a streamline process. We illustrate this integration using two services; Return on Investment (ROI) Measurement as a Service (RMaaS) and Risk Analysis as a Service (RAaaS) in two case studies at the University of Southampton and Vodafone/Apple. The University of Southampton case study demonstrates the cost-savings and the risk analysis achieved, so two services can work as a single service. The Vodafone/Apple case study illustrates statistical analysis and 3D Visualisation of expected revenue and associated risk. These two cases confirm the benefits of BIaS adoption, including cost reduction and improvements in efficiency and risk analysis. Implementation of BIaS in other organisations is also discussed. Important data arising from the integration of RMaaS and RAaaS are useful for management of University of Southampton and potential and current investors for Vodafone/Apple

When Mobile Blockchain Meets Edge Computing

Blockchain, as the backbone technology of the current popular Bitcoin digital currency, has become a promising decentralized data management framework. Although blockchain has been widely adopted in many applications, e.g., finance, healthcare, and logistics, its application in mobile services is still limited. This is due to the fact that blockchain users need to solve preset proof-of-work puzzles to add new data, i.e., a block, to the blockchain. Solving the proof-of-work, however, consumes substantial resources in terms of CPU time and energy, which is not suitable for resource-limited mobile devices. To facilitate blockchain applications in future mobile Internet of Things systems, multiple access mobile edge computing appears to be an auspicious solution to solve the proof-of-work puzzles for mobile users. We first introduce a novel concept of edge computing for mobile blockchain. Then, we introduce an economic approach for edge computing resource management. Moreover, a prototype of mobile edge computing enabled blockchain systems is presented with experimental results to justify the proposed concept.Comment: Accepted by IEEE Communications Magazin

Bipartite electronic SLA as a business framework to support cross-organization load management of real-time online applications

Online applications such as games and e-learning applications fall within the broader category of real-time online interactive applications (ROIA), a new class of ‘killer’ application for the Grid that is being investigated in the edutain@grid project. The two case studies in edutain@grid are an online game and an e-learning training application. We present a novel Grid-based business framework that makes use of bipartite service level agreements (SLAs) and dynamic invoice models to model complex business relationships in a massively scalable and flexible way. We support cross-organization load management at the business level, through zone migration. For evaluation we look at existing and extended value chains, the quality of service (QoS) metrics measured and the dynamic invoice models that support this work. We examine the causal links from customer quality of experience (QoE) and service provider quality of business (QoBiz) through to measured quality of service. Finally we discuss a shared reward business ecosystem and suggest how extended service level agreements and invoice models can support this