Hybrid Cloud Computing Investment Strategies

Tarun Jain and Jishnu Hazra

Production and Operations Management, 2019, vol. 28, issue 5, 1272-1284

Abstract: Cloud providers such as Amazon, IBM, and Microsoft are leasing their computing resources to various businesses providing them an alternative to investing in expensive hardware. Although recent information systems research has examined pricing‐related issues in cloud computing, several important questions still remain. For example, how should buyers decide on the capacity portfolio of private and public clouds? What is the impact of the buyer’s demand uncertainty on the capacity portfolio decision? We address these questions in this study through a stylized model. Our analysis reveals that the investment in cloud infrastructure (private, public or hybrid) is based on the profile of the buyer’s demand. When a buyer faces demand with low mean, she relies on public cloud solutions. If the demand has high mean, then the buyer firm hosts applications on a private cloud. Implementing a hybrid cloud is the optimal strategy when the mean demand is in mid‐range. We find that high demand variability makes businesses to move toward public cloud solutions. We support these insights through examples from practice in the cloud computing industry.

Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://doi.org/10.1111/poms.12991

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:popmgt:v:28:y:2019:i:5:p:1272-1284

Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1937-5956

Access Statistics for this article

Production and Operations Management is currently edited by Kalyan Singhal

More articles in Production and Operations Management from Production and Operations Management Society
Bibliographic data for series maintained by Wiley Content Delivery ().