Pricing Cloud Computing Services

Nicola Dimitri and Ramona Apostol
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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

No 2016/13, Working Papers from Maastricht School of Management

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.

Pages: 24 pages
Date: 2016-10
New Economics Papers: this item is included in nep-ind
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