Delay and Price Differentiation in Cloud Computing: A Service Model, Supporting Architectures, and Performance

Abstract

Many cloud service providers (CSPs) offer an on-demand service with a small delay. Motivated by the reality of cloud ecosystems, we study non-interruptible services and consider a differentiated service model to complement the existing market by offering multiple service level agreements (SLAs) to satisfy users with different delay tolerance. The model itself is incentive compatible by construction. Two typical architectures are considered to fulfill SLAs: (i) non-preemptive priority queues and (ii) multiple independent groups of servers. We leverage queueing theory to establish guidelines for the resultant market: (a) Under the first architecture, the service model can only improve the revenue marginally over the pure on-demand service model and (b) under the second architecture, we give a closed-form expression of the revenue improvement when a CSP offers two SLAs and derive a condition under which the market is viable. Additionally, under the second architecture, we give an exhaustive search procedure to find the optimal SLA delays and prices when a CSP generally offers multiple SLAs. Numerical results show that the achieved revenue improvement can be significant even if two SLAs are offered. Our results can help CSPs design optimal delay-differentiated services and choose appropriate serving architectures.