Cloud ERP simulation

1. +
CLOUD ERP QUERY FLOW CONTROL
SIMULATION WITH QUALITY
RESTRICTIONS AND PROFIT GAINING
CRITERIA
Victor Romanov, Alexandra Varfolomeeva
EOMAS 2013
17 June 2013, Valencia, Spain
In conjunction with CAiSE 2013

2. +
Introduction
 Cloud ERP solutions, providing business processes
automation and improving visibility across the entire
organization, are the highest growth segment of the ERP
software industry.
 One of the important challenges faced by cloud ERP
providers is the effective management of cloud services
performance.
 Cloud ERP clients and cloud service providers pursue
different goals:
 Users want to minimize their expenses while meeting the
cloud ERP performance requirements.
 The ultimate goal of a cloud service provider is the
maximization of its profit through reducing the number of
quality of service violations and decreasing service costs.

3. +
Worldwide SaaS Market Size
Source: IDC
Content Management and Data Capture in the Cloud Computing 3
25.3% CAGR Through 2014
$ 0.00
$ 5.00
$ 10.00
$ 15.00
$ 20.00
$ 25.00
$ 30.00
$ 35.00
$ 40.00
$ 45.00
2009 2014
$ 13.10
$ 40.50
billions

4. +
4
2. Rapid Elasticity
1. On Demand
Self-service
3. Resource
Pooling
4. Measured
Service
Service Models
Cloud Essential Characteristics
What Does the Cloud Mean?
Deployment Methods
 SaaS
 Paas
 IaaS
 Private cloud
 Community cloud
 Public cloud
 Hybrid cloud
5. Broad Network
Access

5. +
Cloud Provider’s Resource
Management Problem

6. + Cloud Service Provision Model
Clients
SaaS
Provider
IaaS Provider
Request for Cloud
ERP Service
Cloud ERP
Response
Process/Reject
Cloud CRM
Other
Software
Application
Admission
Control
Scheduling
Platform Layer
Application Layer
Request/Response on VMs Schedule on VMs
VM
VM
ServersDatacenter

7. +
Cloud Services Provision Model
Clients
SaaS Provider
 On the clients’ side, a request for cloud ERP service is sent to a
SaaS provider’s application layer.
 The utility function for each service user, U(B,D), is a function of
budget, B, that client is going to spend on the service and
deadline, maximum time user would like to wait for response, D.
 Cloud service providers are trying to ensure the quality of service
provided and to reduce the service response time.
where ωi – is the number of requests, τi – is the service time.
 The cost of processing the query should not exceed v0:

8. +
Cloud Services Provision Model
The profit gaining criteria are the following:
 Service Initiation Time: How long it takes to deploy a VM.
 Price: How much a SaaS provider has to pay per hour for using a
VM from a resource provider?
 Data Transfer Price: How much a SaaS provider has to pay for
data transfer from local machine (their own machine) to resource
provider’s VM or for transfer from resource provider’s VM to local
machine?
 Processing Speed: How fast the VM can process?
IaaS Provider

9. +
Cloud ERP Queries Classification
 All incoming queries should be divided into several services classes
 Different kinds of requests require different types of resources
Business_Queries Level
Business_Queries
Processed Outflow
Business_Queries
Rejected Outflow
Business_Queries
Incoming Flow
Business_Queries Processed
Business_Queries Rejected
Standard_Queries Level
Standard_Queries
Incoming Flow
Standard_Queries
Processed Outflow
Standard_Queries
Rejected Outflow
Standard_Queries Processed
Standard_Queries Rejected

10. + Service Queries Processing
 Service requests processing can be determined using the Cobb-Douglas
function, often used by economists to model production.
 Let N be the total number of queries that can be processed by Cloud ERP
provider, A – the number business service queries, and B – the number of
standard queries.
 The function for business service is expressed as:
 where A – the number of business queries, K, capital and L, labour are factors
of business queries production, α-productivity factor, β1+β2=1.
 Business class services generate more revenue. The number of business
class requests is about 20%, their service is more expensive and in case of
idle capacity the losses are unacceptable.
 The function for standard service is expressed as:
 The number of standard queries is about 80% and the service price is much
lower.

11. +
Cloud ERP Provider’s Profit
 Let a new user submit a business service request at
submission time to the SaaS provider.
 The client offers a specific amount of money (Budget) to SaaS
provider.
 Let Business Service Price be the total cost incurred to the
SaaS provider by processing the user request.
‘Business Service Profit’=’Business Clients
Budget’–‘Business Service Price’
Data Transfer Business
Cost
VM Business Cost
Business Request
Processing CostBusiness Penalty Cost
Business Service Price

12. +
Cloud ERP Query Flow Control Simulation
Business Queries Level
Business Queries
Processed Outflow
Business Queries
Rejected Outflow
Total Business Service
Cost
Data Transfer Business
Cost
VM Business Cost
Business Clients
Budget
Business Request
Processing CostBusiness Penalty Cost
Business Service Price
Business Service Profit
Business Queries
Incoming Flow
Business Queries Processed
Business Queries Rejected
Standard Queries Level
Standard Queries
Processes Outflow
Standard Queries
Rejected Outflow
Total Standard Service
Cost
Standard Data Transfer
Cost
VM Standard Cost
Standard Clients
Budget
Standard Request
Processing Cost
Standard Penalty Cost
Standard Service Price
Standard Service Profit
Standard Queries
Incoming Flow
Standard Queries Processed
Standard Queries Rejected
Total Profit
Service Class Control
Rate

13. +
1 фев 3 фев 5 фев 7 фев
2
3
4
Queries/min
BusinessQueries
IncomingFlow
For evaluation purposes only!
1 фев 3 фев 5 фев 7 фев
0
5
10
15
20
25
Queries/min
StandardQueries
IncomingFlow
For evaluation purposes only!
1 фев 3 фев 5 фев 7 фев
(USD60 000)
(USD30 000)
USD0
Business Service Profit Standard Service Profit
For evaluation purposes only!
Service Class Rate
0 20 40 60 80 100
%
For evaluation purposes only!
1 фев 3 фев 5 фев 7 фев
(USD150 000)
(USD100 000)
(USD50 000)
USD0
TotalProfit
For evaluation purposes only!
Example 1

14. +
1 фев 3 фев 5 фев 7 фев
2
3
4
5
6
Queries/min
BusinessQueries
IncomingFlow
For evaluation purposes only!
1 фев 3 фев 5 фев 7 фев
0
5
10
15
20
25
30
Queries/min
StandardQueries
IncomingFlow
For evaluation purposes only!
1 фев 3 фев 5 фев 7 фев
(USD300 000)
(USD200 000)
(USD100 000)
USD0
Business Service Profit Standard Service Profit
For evaluation purposes only!
Service Class Rate
0 20 40 60 80 100
%
For evaluation purposes only!
1 фев 3 фев 5 фев 7 фев
(USD300 000)
(USD200 000)
(USD100 000)
USD0
TotalProfit
For evaluation purposes only!
Example 2

15. +
Conclusion
 Although cloud ERPs are widely deployed, the dynamic cost-effective
service requests processing with the reduced number of SLA
violations is still one of the most intractable problems of cloud service
providers.
 Profit gaining is the key driving force for service providers, and the
quality of service provided is the focus of clients’ attention.
 Previous approaches do not take into consideration the personalized
features of the client’s request and the elasticity of SLA properties in
cloud computing scenario, which can be used for increase the profit
of cloud service providers.
 In order to improve this situation, we first establish a cloud ERP query
flow control model, where incoming queries are divided into several
classes, taking in account SLA constraints and profit gaining criteria.
 In our research we have built a cloud ERP simulation model that is
based on macroeconomic sub-model, expressing the production
function, and stochastic sub-model, presenting stochastic the flow of
queries.

16. +
Q&A:
victorromanov1@gmail.com
aovarfolomeeva@gmail.com
Thank you!

17. +
CLOUD ERP QUERY FLOW CONTROL
SIMULATION WITH QUALITY
RESTRICTIONS AND PROFIT GAINING
CRITERIA
Victor Romanov, Alexandra Varfolomeeva
EOMAS 2013
17 June 2013, Valencia, Spain
In conjunction with CAiSE 2013