We present a cloud resource procurement approach which not only automates the selection of an appropriate cloud vendor but also implements dynamic pricing. Three possible mechanisms are suggested for cloud resource procurement: cloud-dominant strategy incentive compatible (C-DSIC), cloud-Bayesian incentive compatible (C-BIC), and cloud optimal (C-OPT). C-DSIC is dominant strategy incentive compatible, based on the VCG mechanism, and is a low-bid Vickrey auction. C-BIC is Bayesian incentive compatible, which achieves budget balance. C-BIC does not satisfy individual rationality. In C-DSIC and C-BIC, the cloud vendor who charges the lowest cost per unit Qos is declared the winner. In C-OPT, the cloud vendor with the least virtual cost is declared the Winner. C-OPT overcome the limitations of both C-DSIC and C-BIC. C-OPT is not only Bayesian incentive compatible, but also individually rational. Our experiments indicate that the resource procurement cost decreases with increase in number of cloud vendors irrespective of the mechanisms. We also propose a procurement module for a cloud broker which can implement C-DSIC, C-BIC, or C-OPT to perform resource procurement in a cloud computing context. A cloud broker with such a procurement module enables users to automate the choice of a cloud vendor among many with diverse offerings, and is also an essential first step toward implementing dynamic pricing in the cloud A Mechanism Design Approach to Resource Procurement in Cloud Computing
Resource procurement of cloud resources is an interesting and yet unexplored area in cloud computing. Cloud vendors follow a fixed pricing strategy (“pay as you go”)for pricing their resources and do not provide any incentive to their users to adjust consumption patterns according to availability or other factors.
Most cloud vendors use the pay-as-you-go model. Many are loath to negotiate contracts as they lack understanding of a sound theoretical basis for dynamic pricing. The default agreement offered by a vendor often contractually benefits the vendor but not the user, resulting in a mismatch with user requirements. Hence, this kind of pricing favors the cloud vendor. Also, there is no clear commitment on SLAs.
Each cloud user has resource requirements. The users perform reverse auctions for procuring resources (which are also called procurement auctions). Cloud vendors offer resources, but with varying costs and quality metrics. The goal of the cloud user is to minimize the total cost of procuring resources without compromising quality of service. To minimize the procurement cost, it is necessary for the cloud user to know the real costs of cloud vendors. A user announces its specifications for desired resources and quality of service to all cloud vendors, with the broker acting as a middleman. The cloud vendors decide whether to participate in the auction based on the user information and submit their bids to the broker.