Revenue Management for Cloud Providers--A Policy-Based Approach under Stochastic Demand

Competition on global markets forces enterprises to make use of new applications, reduce process times and cut the costs of their IT-infrastructure. To achieve this commercial users harness the benefits of Cloud computing as they can outsource data storage and computation facilities, while saving on the overall cost of IT ownership. Cloud services can be accessed on demand at any time in a pay-as-you-go manner. However, it is this flexibility of customers that results in great challenges for Cloud service providers. They need to maximize their revenue in the presence of limited fixed resources and uncertainty regarding upcoming service requests while contemporaneously considering their SLAs. To address this challenge we introduce models that can predict revenue and utilization achieved with admission-control policy based revenue management under stochastic demand. This allows providers to significantly increase revenue by choosing the optimum policy.