Cloud technology has started to replace the traditional on-premise legacy software and today almost all the major businesses are migrating towards cloud. A survey conducted by McAfee suggests that 87% organizations experience business acceleration by using cloud services. In the nascent stages of growth, security was a major concern for companies and hence companies avoided moving to cloud. The survey also suggests that 52% of the organizations experience better security in the cloud than on-premise IT environments. Almost 36% of the organizations believe that they can enforce data loss prevention in the cloud. Companies benefit in numerous ways by migrating to cloud in terms of opportunity cost, reduced IT cost, a faster go-to market , business growth, improved security, expansion to new markets.

1. Managing and Pricing the Cloud
Project Report for Microeconomics course
PGPEM-2019
Team members:
Nandini Bhavasar 1916007
Kanchan Kalra 1916024
Saurabh Kanaujia 1916025
Shekhar Kanodia 1916026
Gurunathan Subramanyan 1916066
Abhishek Suresh Babu 1916067
Sridharan Vallabhaneni 1916076

2. 2
Table of Contents
Project Report Objective & Executive Summary.............................................................................. 4
Project Report Objective ...........................................................................................................4
Executive Summary................................................................................................................... 4
Introduction.................................................................................................................................5
Market Structure.......................................................................................................................... 5
The Oligopoly Market................................................................................................................ 5
Fewfirms.............................................................................................................................. 5
Existence of Price Rigidity/Non-Price Competition..................................................................5
Barriers to Entry of Firms.......................................................................................................5
Advertising............................................................................................................................ 5
Group Behavior..................................................................................................................... 6
Nature of the Product............................................................................................................ 6
Indeterminateness of Demand Curve ..................................................................................... 6
Economies of scale................................................................................................................ 6
The Competitive Market............................................................................................................ 6
SaaS Market Analysis............................................................................................................. 6
Production costs of Cloud Services.................................................................................................8
Rack Cost.............................................................................................................................. 8
Server Cost........................................................................................................................... 8
Onboarding the customers.....................................................................................................9
Support cost......................................................................................................................... 9
Promotion activities.............................................................................................................. 9
Fixed Cost............................................................................................................................. 9
Variable Cost....................................................................................................................... 10
Price Competition....................................................................................................................... 10
Cloud Pricing Schemes......................................................................................................... 11
Dynamic Pricing................................................................................................................... 11
Market-Dependent Pricing................................................................................................... 11
Cloud Pricing Model ............................................................................................................ 11
Pricing models..................................................................................................................... 12
Price Discrimination............................................................................................................. 12
Profit Maximization .................................................................................................................... 14
Consumer Behavior.................................................................................................................... 14
Appendix.................................................................................................................................... 15

3. 3
Glossary..................................................................................................................................... 15
References................................................................................................................................. 15

4. 4
Project Report Objective & Executive Summary
Project Report Objective
Cloudtechnologyhasstartedtoreplace the traditional on-premise legacysoftware andtodayalmost
all the major businessesare migratingtowardscloud.A surveyconductedbyMcAfee suggeststhat
87% organizationsexperience businessaccelerationbyusing cloudservices. Inthe nascentstagesof
growth,securitywasa major concernforcompaniesandhence companiesavoidedmovingtocloud.
The surveyalsosuggeststhat52% of the organizationsexperience bettersecurityinthe cloudthan
on-premise ITenvironments.Almost36% of the organizationsbelievethattheycanenforce dataloss
preventioninthe cloud. Companiesbenefitinnumerouswaysbymigratingtocloudintermsof
opportunitycost,reducedITcost,a fastergo-tomarket, businessgrowth,improvedsecurity,
expansiontonewmarkets.
The followingmicroeconomicsconceptsare coveredinthe report:
 Oligopolisticmarketstructure of the cloudindustry
 ProductionTheory - Economiesof scale
 Cost of Production – Total cost, Fixedcost,Variable cost
 ConsumerTheory
 PricingwithMarketPower
 Profitmaximization
Executive Summary
The cloud can be broadlysegmentedintothe below three categories:
1. Infrastructure asa service (IaaS)
 Hardware service suchas computingpowerandstorage are offeredunderthis
category.
 Examples –AWS and Azure
2. Software asa service (SaaS)
 Online licensedapplicationsare offeredbasedonpayasyou model oron-demand.
 Example – MicrosoftOffice 365
3. Platformasa service (PaaS)
 PaaS offersplatformforcreatingsoftware thatisdeliveredviainternet.
 Example – Force.com(Salesforce)andHeroku
For thisreport,the major focushasbeenon the IaaS segment.The IaaScloudindustryisan
oligopolisticmarketwhichisdominatedbythree majorplayers –AmazonWebServices(AWS),
MicrosoftAzure and Google Cloud.AWSenjoysthe firstmover’sadvantagesince itwaslaunchedin
2006, whereasAzure waslaunchedin2010. Despite thatAzure hasthe privilege of servingmore
than 80% of the Fortune 500 companies.Onthe otherhand, AWS isa popularchoice amongst
startupssuch as Netflix,Pinterest,SpotifyandAirbnb.Similarly,boththesemajorplayershave tried
to segmenttheirmarketsbyincorporatingheterogeneityintermsof focusonhybridcloudsor
supportfor thirdpartyapplications.

5. 5
Introduction
IT expenditure hasbeenamajorcost forall the majorenterprises.The majorcomponentsof this
expense are computationcostandstorage costalongwithIT consultancyandservicingcost.
Historicallythe companieswere forced topurchase the physical hardware whichnotonlyincreased
the costs but alsocreatednon-liquidassets.Cloudcomputingprovidesacost-effective,efficientand
flexible systemof managingthe ITservicesforthe companies.The conceptof on-demandresources
has made iteasy forsmall companiesandstartupstoscale up theircore servicesbyleveragingthe
featuresof cloudcomputing.Itisa win-winsituationforall where the producersurplusand
consumersurplusincreasedsimultaneouslydue to anincrease inthe consumerbase and the
reductionof IT expenditure.
Market Structure
The Oligopoly Market
Oligopoly comprisesof few large sellers (but more than two) of the homogeneous or differentiated
products.
Cloudbusinessfitsthe definitionof ‘oligopoly’veryclosely.Givenbelow are some of the keyfeatures
of oligopoly and how cloud business mimics the behavior given in each definition of feature.
Few firms
In Oligopoly, there are number of firms in market but only few are large competitive players, which
cater to the significantamountof the total marketdemand.Those few playerstryto manipulate the
price and offerings to dominate in market.
The cloud market too has few players who has a significant market share and power. As per some
industry reports, Amazon Web Services (AWS) has 34 percent market share, followed by Microsoft
with 14 per cent and the rest is by other players like Google, IBMand Alibaba.
Existence of Price Rigidity/ Non-Price Competition
InOligopoly,the competitive playersdoesn’tdeviate toomuchfromitspricingplansincereductionin
price may trigger other players to drop prices which can lead to price war and thereby hurt all
producers / service providers.
In April 2013, Amazon and Google entered into price war (Three days after Google announces a 4%
price reduction, Amazon shoots back with a 26% drop). And then again in March 2017, Cloud price
wars was back on when Amazon responded to Google’s flexible cloud pricing announcement.
Barriers to Entry of Firms
The hurdle of entry and exit in the cloud computing industry is a difficult one to cross. Major
companies such as Google, Amazon and Microsoft has invested so much in the infrastructure to
provide cloud services that they have “first mover advantage”. Any new entrant has to access the
marketavailability,the patentsissuedtothesecompanies,costrequiredtobuildupthe infrastructure
before making an entry into this business. One must have a strategic businessanalysis, investment
requirements,patents,knowledge assets,etc.,andthe competitiveedgetocompetewiththese cloud
provider giants.
Advertising
In oligopoly,since the majorplayers cannotreduce the price asit couldleadto price war, one wayto
manipulate/ capture market is via advertising.The competitive firms keep a tab about the moves of

6. 6
each other and make corresponding policy changes. This sometimes leads to aggressive advertising
campaign to beat the other players in the market.
As perarticle in Nov,2017 in Seattle Times,Amazonneverbelievedinadvertisinguntil afterAmazon
elbowedoutIBMto wina high profile contractto provide data centerservicesto CIA,IBM plastered
buses in Las Vegas with ads for its services as visitors gathered for Amazon's 2013 "re: Invent"
conference.Afteracouple of yearsspenttestingthewaterwithlimitedadvertisingexperiments,AWS
decided to strike back this year with its first major brand campaign
Amazon even redesigned the AWS logo, leaving behind the orange cluster of blocks and moving to
new logo of AWS letters with a smiling arrow on top.
Group Behavior
The firms in an industry exhibit varied behavior ranging from competitiveness to collaboration to
capture market and it is required to understand this group behavior of the firms.
For an oligopolisticfirmthe behaviorof firmishighlyunpredictablecomparedtoothermarketforms.
Because theytendtocollude tomaximizetheirprofitsorsometimestheirobjectivesmaybe different
which may lead to exhibit seemingly un-rational behavior.
In June 2019, MicrosoftAzure and oracle clouddecidedtolinktheircloudcomputingservicestotake
on Amazon who is the currently the market leader in cloud offerings.
Nature of the Product
The firmsunderoligopolymay produce homogeneousordifferentiatedproduct.If the firmsproduce
a homogeneousproduct,the industryiscalleda pure or perfectoligopolyandif the firmsproduce a
differentiated product, the industry is called differentiated or imperfect oligopoly.
In cloudbusiness,the productofferingsare bothhomogeneousaswell asdifferentiated.Few players
offersimilarservices(sameDB,OSpackage) whereasfewtrytomarketdifferentiatedproductsuchas
Oracle by advertising about its self-driving database and making claims that even Amazon runs on
Oracle database.
Indeterminateness of Demand Curve
In oligopoly, firms keep changing the prices / quantity and thereby their demand curve is
indeterminate.Kinkeddemandcurve isone of the hypothesistoexplainthe price rigidity.The kinkin
demand curve occurs when the elastic prevailing price becomes inelastic all of sudden.
Economies of scale
The economiesof scale isdefinitelyamajorphenomenoninthe cloudindustry,especiallyforthe
IaaS and PaaS segment.The majorplayerssuchas AWSand Azure have scaledtheirproductionto
such a level thattheycandouble theirproductioneasilywithoutincurringamajorincrease incosts.
Thisis due to the acquisitionof ahuge pool of talenteddevelopersfromthe IvyLeague institutes.
The smallerplayersonthe otherhandstruggle withhighratesof attritionwhichnotonlyincreases
theirvariable costsbutalsopreventsthemfromleveragingthe learningcurve advantages.
The Competitive Market
SaaS Market Analysis
Software asa service marketisclosettoa perfectlycompetitive marketwhere there ismany service
providerswhosometimesprovide homogeneousproducts.Forinstance,the online texteditors,
online photoeditors,online pdf converters.Theydonothave monopolypowersandhence are not

7. 7
able to fix price andappearto be price takers.Rathertheyare dependentonthe online
advertisementsforgeneratingrevenues.
Similarly,the entryandexittobarriersare notveryhighfor the SaaS markets where anyone can
launcha software as a service withminimumexpenses.The fixedcostinvolvesjustthe costof basic
hardware suchas laptopsandthe variable costincludesthe subscriptioncosttocloudservicessuch
as AWS forscalingthe applications. Likewise,the humanresourcecostisalsoa variable costfor the
SaaS market.
Giventhe ease of entryand exitfromthe SaaS market,there existmultiple playersinthe initial
phases.Hence mostof the startups intheirinitial stagesof seed/angel fundingformapart of the
perfectlycompetitive SaaSmarket.
Also,inthe SaaS market,the profitsearnedinthe longtermare almostzero if the startupsfail to
scale up or differentiatetheirproducts.Mostof the companiesorfirmstendtoexitif theyare not
able to meetthe variable costandhence the shutdownrule appliestothismarket.These daysthe
investorsalsolookingforuniteconomicswhere theydonotwantto considertheirinvestmentasa
sunkcost and hence putpressure onthe firmsto differentiate theirproductsandmove awayfrom
the perfectlycompetitive marketstowardsoligopolisticmarketswhere theycanhave some
monopolypowersdue totheirdifferentiatedproductsanddue tothe relativelyinelasticdemand.

8. 8
Production costs of Cloud Services
The motivationtostudythe productioncostsof Cloudservicesarisesbecause the finalpricesforthe
Cloudofferingsmade bythe Cloudgiantsmajorlydependonthe investmentsandthe coststhey’re
incurringinorderto make these servicesavailable.Hence,before deepdivingintothe pricingof the
CloudServices,thissectionprovidesabrief onthe productioncostsinvolved.
Production costs of Cloud Services
Rack Cost
The physical storage costsof hostingthe machinesformthe majorchunkof the productioncosts.This
includes the real estate costs of hosting the data centers, to have it powered continuously, the
networkbandwidthandthe investmentsmade tomaintainthe physicalmachinesinthe datacenters.
Another major contributor to the productions costs is due to the replication – This arises from the
necessity to maintain redundant copies for Business Continuity Plans and also to provide improved
performancesbygeo-replicateddataacrossthe globe.Andmostimportantly,coolingcostsplayavital
role here.Itisa commonknowledgethatmajorspendinadatacentergoestowardsthe coolingcosts
andgiantslike Microsofthave startedinvestinginUnder-waterdatacentertomainlybenefitfromthe
reduced cooling cost amongst other perks.
Server Cost
This section covers the hardware costs of the machines involved along with the costs to keep the
machines patched with the latest updates. We should also note that in any given data center the
varietyof machinesSKUsbeinghostedvariesgreatlyandhence the maintenance costsare also high.

9. 9
Given how frequently we see newer generation computing systems coming into the Software
landscape, it is nearly impossible for any data center to be able to run on a homogenous machine
function. Hence, the added overhead of maintaining machines spanning across a wide spectrum
becomes unavoidable. The network costs of having these machines be online and always available
also fall into this bucket of costs incurred by the Cloud Service providers.
Inadditiontothe above,some of the othernoteworthyspendsof aCloudService providerare below.
Onboarding the customers
The Cloud service providers also spend significant efforts and resources to provide a seamless
experience toonboardnewcustomersfromnon-cloudplatformsorfromothercloudserviceproviders
onto their products.
Support cost
Every major Cloud service provider today does compulsorilyprovide customer support for all issues
thata userfacesinthe cloudservicesitoffers.The SLAsvaryfromrangesspanningfromunder4hours
for SEV 0 issuesto 4 daysfor issueswithlowerseverity.Thiscontinuoussupportalsoentailsa lot of
monetary investments from the service provider.
Promotion activities
Like anyothercompetitiveindustry,the cloudserviceprovidersalsoinvestinpromotingtheirproducts
viathe online advertisingorthroughthe variouseducational programstheyrunin-ordertoinfusethe
usage of their products into students or techies in the industry.
Although,notaverycleardistinctioncanbe drawnbetweenthese,inthe shortrun - the rackcost and
server cost can be demarcated as the fixed costs and others such as Power consumption, network
bandwidth, and marketing are the variable costs.
Costs Overview
Fixed Cost
The depreciationcostis the most commonand significantcostsincurredon IT assetslike the servers
and hard disks. This depreciation is due to the technological advancements and lifespan of these
assets. An occupancy cost is the real estate area required to deploy the racks and servers. An
administration cost is again incurred in administrating, maintaining the servers and hard disks. The

10. 10
power consumption cost includes the cost to power the servers, hard disks, cooling agents like air
conditioners that are continuously engaged during idle time. The cost incurred to setup near-
shore/customer sites, Disaster Recovery Sites that ensures high availability, Network Infrastructure
cost for network gears like routers and switches all contribute to the fixed cost.
Variable Cost
The powerconsumedbycoolingagents,serversandharddisksat an active state contributes
significantlytowardsvariable costs.Additionally,the costsincurredinbranding,marketingandother
overheadscanbe consideredasVariable cost.
If we were toput an equationtothe total cost (TC) incurredbythe cloudservice providers:
Total Cost (TC) = Fixed Cost (FC) + Variable Cost (VC)
Where,we define the followingasperour understanding:
FixedCost = DepreciationCost+Occupancy Cost+ AdministrationCost+ PowerConsumptionCost
at idle mode + NetworkCostat idle mode +DisasterRecoverySite cost
Variable Cost = Powerconsumptionatactive mode +NetworkCostat active mode + Marketingcost
+ otheroverheads
Price Competition
Cloudcompaniesform anoligopolisticmarketandcompete witheachotherbasedonprice
dimension.The NashEquilibriumconceptscanbe usedtostudyprice competition.Allthe companies
inthe cloudmarketofferhomogenousproductswithsome degreeof productdifferentiation.These
differentiationscanbe achievedbybelow characteristics
1. Ease of operations
2. Configurability
3. Performance
4. Reliabilityandsecurityorriskmitigation
5. Customerservice

11. 11
Cloud Pricing Schemes
CloudComputingprovidershave variousoffersbasedonSLAswith adifferentschemeforcalculating
the price.The client’sgoal isto have maximumservice foralow price and provider’sgoal isto
maximumprofit.
There are twotypesof pricingschemeswhichare prevalentinthe Industry.
i. FixedPricing
ii. DynamicPricing
Fixed Pricing
Each service providerdefinesprice forresourcesthatcouldbe prohibitive andthusleadtoa reduced
customerbase and decrease inrevenueandprofits.Fixedpricingincludesapricingmechanismas
pay-per-use pricing,subscriptionandlist price /menuprice.
i. Pay-per-usepricing
a. Subscriptionpricing
b. Hybridpricingmodel
Pay-per-usepricing
Users onlyhave topay for the time or the quantitytheyconsumesonaspecificservice.
PricingschemesforPay-per-USE
a. Subscriptionpricing: Userspay price ona recurringbasisfor the termtheyhave
boughtthe subscriptionforthe service.
b. HybridPricing:Dedicatedserversare providedinadvance andsubscription-
basedpricingisdone inthismodel.
DynamicPricing
The price of the resourcesisdeterminedaccordingtodemandandsupply.Ascomparedtofixed
prices,the dynamicpricingthatreflectsthe real-time supplydemandrelationshiprepresentsamore
promisingcharge strategythatcan betterexploituserpaymentpotentialsandthuslargerprofit
gainsat the cloudprovider.
Market-Dependent Pricing
Customerpaysdependingonthe real-timemarketconditionsandconstraints.
Cloud Pricing Model
Pricingpresentsthe exchangeprocesswhencustomer/enduserpaysforserviceswhichhave been
offered bythe service provider.Some of the mostcommonfactorsaffectingpricinginthe cloud
resourcesare presentedinthe table below.
Here are otherfactors whichaffectthe price inthe cloudresources.These factorscouldbe fixedor
variable.Some of these factorsthatinfluence the price of cloudresourcesare presented
i. MonitoringService
ii. Social Categoryof Customers
iii. Cost of Data Center
iv. User Reputation
v. ProviderReputation
vi. PublicReview

12. 12
vii. SLA (Service LevelAgreement)
viii. Co-CloudUsers
Pricing models
Beloware the pricingmodelswhichhave currentlyimplementedandusedforCloudPricing.
i. Pay-as-you-go:Price issetby service providerandremainsconstant.Thismodel isstatic.
Unfairto the client.He mightpaymore than necessary
ii. Subscription:Price assigned basedonsubscription.Thismodel isstatic.Accordingtothis
model clientsometimescancharge more or less.
iii. Pay-for-resources:Thismodel (static) iscostbased.Offersmaximumutilizationfor
resources.Isfairfor clientandcloudservice providers.
iv. Hybrid pricing: Price changedaccordingto the jobqueue waittimes.Thismodel isfairto
clients.
v. Value-basedpricing:Price assignedonclient’sperceive basis.Thismodel isdynamic.
Fair to producerswhere pricesare setonthe value perceivedbythe client
vi. Cost-basedpricing:In thismodel the priorityistoincrease the profit.Itisnot difficultto
calculate the price.Clientrole isnotprimary.
vii. Competition-basedpricing:Price assignedaccordingtocompetitors’prices.Thismodel
isdynamic.The model isfairto clientsif the price isassignedonthe basisof
competition.
viii. Customer-basedpricing:Price assignedaccordingtowhatclientwantand the needto
pay.This model isfairforclientsif there are takenintoaccount.
Price Discrimination
CloudcompaniesfollowSecond-DegreePrice Discrimination. Forexample,AmazonWebServices,
(AWS) charges$.0023 GB forstoringthe first50 TB/month. AWS charges$0.022 per GB for the next
450 TB / monthand $.0.021 perGB over500 TB / Month. The seconddiscriminationusedinthis
scenarioiscalled“blockpricing”.

13. 13
CloudIndustryfollowsthird-degree discriminationaswell.Theyofferdifferenttypesof servicesfor
differentgroupsandcharge each groupin a differentmanner.Forexample,AWSchargeshas
differentclassesacrosstheirS3Storage service andchargesdifferentlyforeachclass.
Bundling
CloudcompaniesoffervariousserviceslikeInfrastructureasa service,Platformasaservice, and
Software asa service. Fora prospective client,the cloudcompaniesoftenbundle theirservices
togetherlike IAASandSAAStogethercome upwitha differentpricing.Thishelpsthemtosell more
than one service toa potential client.

14. 14
Profit Maximization
In termsof profitmaximization,the bigbrandstendtooutperformthe smallerplayersbyahuge
margin.The reasonis that theyhave a huge difference betweentheirtotal costand total revenue.
Due to the economiesof scale,theydonothave toincur a huge cost forincreasingtheirproduction.
Theirfixedcostsare negligible comparedtotheirvariable costs.The fixedcostsinclude the
hardware and software costsforproduction.The otherexpensesare variable costsincludingthe
propertiesusedforoffices. Similarly,theyoutsource theirnon-core functionstothirdpartiesor
contractors to minimizethe costs.Cloudproductsare capital generatingassetswithhuge cashflow.
Theyneedonlyone-time developmentcosts,butdue totheirsubscription-basedpricing,they
generate aconstant streamof revenuesforyears.Althoughdue toprice rigidity,manytimesthe
firmsare notin a positiontoaltertheirpriceshoweverempirical evidence suggeststhatcustomers
are willingtopayhigherpricesforcloudservicesandwhencomparedtosecurityandperformance,
pricingplaysa minorrole incloudadoption.Infact,the marketperceptionisthatAWSisAmazon’s
cash cow and isapparentlyfundingitswaron rivalssuchas Walmart.
For the smallerfirms,however,the situationisentirelydifferent.Forpricing,theyhave tofollow the
price leaderssuchas AWSand Azure,however,theyare facedtobearhuge costsof productiondue
to inconsistentandlow-qualityhumanresource supply.Also,theydonothave standardized
processesandhence the inefficienciesandexperimentationsleadtohuge sunkcosts.
Consumer Behavior
The publiccloudmarkethas beenonan exponential growthtrajectorysince2013. It is expectedto
hit236 billionUSDby2020 accordingto Forrester’sforecast(Source:analytics-magazine.org).Ina
surveyheldbyIBM, cloudutilizationinacouple of the major techcompaniesrose to78% in2018
from34% in2012. Consumerbehaviorforcloudprimarilyfocusesonthe total costof ownership
(TCO) since the beginning.Enterprisesleveragethe cloudtoreduce theirTCOand accelerate the
pace of developmentandinnovationasopposedtoinvestinginconventional infrastructure.There
are three majortypesof consumersforthe cloud;Organizations,Academicresearchersand
Individuals.Organizationscanfurtherbe dividedintoprivateorganizationsandgovernmental
organizations.Irrespective of the type of consumer,majorreasonbehindchoosingcloudisthe
availabilityof infrastructureandsoftware ondemandata scale whichcustomerwouldlike touse.
However,organizationsandresearchersare primaryconsumersof IaaSandPaaS,while individuals
are the majorconsumersof SaaS. Most commonexamplesof individual cloudconsumptionare
MicrosoftOffice 365 andiCloud.
As the usage of cloudservices- IaaSinparticular,dependsonthe usage patternsof the consumer,it
isimportantto analyze the price elasticityforthe benefitof enterprises.Althoughpricinghasan
impactin selectinganappropriate cloudprovider,someexecutiveswe have interviewedhave given
more weightage toaccessibilityandavailability. Accessibilityisup-time,stabilityandon-demand
service qualitywhile availabilitydependsonthe type of stakeholders.Mostacademicandprivate
enterprisesdonotmindthe local availabilityof datacenters,aslongas latencyand support
requirements are met.However,governmental agenciespreferlocal availabilityof datacentersor
private cloud(on-premises) toadhere todatasecuritypolicies.Basedonourinteractionswithkey
stakeholdersatmultiple organizations,andliterature survey,keyfactorsimpactingclouddecisions
are stability,price andstorage locations.Price discriminationisalsoakeystrategybecause of the
demandvariabilitybetweenpeakhoursandoff-peakhours.Duringthe peakhours,price elasticityof
demandisverylowas organizationsare willingtopayhigherpremiumsasopposedtonon-peak
hourswhenelasticityishigh;creatinganopportunitytoprovide thirdorderprice discrimination.

15. 15
Appendix
Glossary
SLA – Service Level Agreement
SEV – Severity
References
 https://thesai.org/Downloads/Volume7No2/Paper_11-
Pricing_Schemes_in_Cloud_Computing_An_Overview.pdf
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centers-may-cost-less
 White Paper:“A Consumer-ProviderCloudCostModel ConsideringVariableCost”byWerner
Mach and ErichSchikuta,Universityof Vienna,ResearchGroupWorkflow Systemsand
TechnologyRathausstrasse 19/9,1010 Wien,Austria
 (IJACSA) International Journal of AdvancedComputerScience andApplications,Vol.7,No.2,
2016 - “PricingSchemesinCloudComputing:AnOverview”
 StrategicManagementof CloudComputingServices:FocusingonConsumerAdoption
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says/articleshow/55380072.cms
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market/7342

16. 16
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