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Cloud computing takes away much of the need to plan future IT demands from the consumer, and puts it in the hands of the provider. Consumers don’t need to give advance notice to start or terminate virtual machines, and can do so in real time to reflect changing business objectives. It is the task of the cloud IaaS provider to optimise the use of her infrastructure, and ensure there are enough resources available. Achieving optimum server utilisation in the data centre is particularly challenging – advance notification can help the provider to schedule workloads more efficiently, but this is at odds with one of the key benefits of cloud computing. In this paper, we propose a pricing method that combines options contracts with on-demand purchasing. We show that the method can provide consumers with the flexibility and cost-benefits afforded by cloud computing, and can benefit the provider by improving server utilisation and therefore reducing energy costs. Furthermore, we show how provision-point contracts, often used by deal-of-the-day websites such as Groupon, can further improve the method, making it even more attractive to the provider.

Options, forwards and provision-point contracts in improving cloud infrastructure utilisation