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Pricing Cloud Computing Services

Author

Listed:
  • Nicola Dimitri

    (Professor of Economics, Department of Political Economy and Statistics University of Siena, Siena-Italy. Chair in Innovation Procurement, Maastricht School of Management Maastricht-NL; Life Member, Clare Hall College,Cambridge-UK)

  • Ramona Apostol

    (PhD Law, Corvers Services)

Abstract

The economics of cloud computing has recently attracted increasing attention. In particular, a subject which is currently under debate is how prices charged to customers for cloud use are formed, as alternative pricing rules could be considered. Based on the three pricing schemes used by Amazon, the main global cloud service provider, in the paper we tackle two main issues. First we present a methodology for the relevant parameters of the pricing rules to be determined in an optimal way, that ius maximising the provider revenue. Then, based on this analysis we discuss reasons for co-existence of three, rather than fewer pricing rules for accessing the cloud. Our findings seem to suggest that this is due to a larger coverage of potential demand for service, as well as to the possibility for the provider to infer useful information on the customers willingness to pay for cloud services.

Suggested Citation

  • Nicola Dimitri & Ramona Apostol, 2016. "Pricing Cloud Computing Services," Working Papers 2016/13, Maastricht School of Management.
    • Handle: RePEc:msm:wpaper:2016/13
    as

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    File URL: http://web2.msm.nl/RePEc/msm/wpaper/MSM-WP2016-13.pdf
    File Function: First version, 2016
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    References listed on IDEAS

    as
    1. Patrick Bolton & Mathias Dewatripont, 2005. "Contract Theory," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262025760, December.
    2. Ergin Bayrak & John P. Conley & Simon Wilkie, 2011. "The Economics of Cloud Computing," Korean Economic Review, Korean Economic Association, vol. 27, pages 203-230.
    3. Chaim FERSHTMAN & Neil GANDAL, 2012. "Migration to the Cloud Ecosystem: Ushering in a New Generation of Platform Competition," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(85), pages 109-123, 1st quart.
    4. repec:icf:icfjme:v:09:y:2011:i:2:p:7-22 is not listed on IDEAS
    5. Christopher Yoo, 2011. "Cloud Computing: Architectural and Policy Implications," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 38(4), pages 405-421, June.
    Full references (including those not matched with items on IDEAS)

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