Request Outsourcing and Insourcing with Supply Function Bidding in Cloud Federation

The emerging cloud federation paradigm advocates cooperation among different cloud providers (CPs), where the CPs with resource limitation during spikes in demand can outsource the requests to other CPs with idle resources in federation. Meanwhile, underutilized providers can lease part of their unused capacity to other federation members, in order to avoid wasting idle resources. In this paper, we investigate the request outsourcing and insourcing problem in a broker-based cloud federation market, where one subset of CPs need to outsource their requests and the other subset of CPs are available to run the outsourced requests (i.e., insourcing). Under the assumption that each CP has limited information of the market, we propose a market mechanism based on supply function bidding, where each CP submits a single bid to choose a supply function from a group of parameterized ones. We show that the mechanism ensures the efficient operation of the market by maximizing the social welfare of the federation. Numerical results validate our proposed scheme.