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Scheduling Flexible Demand in Cloud Computing Spot Markets : A Real Options Approach

Title data

Keller, Robert ; Häfner, Lukas ; Sachs, Thomas ; Fridgen, Gilbert:
Scheduling Flexible Demand in Cloud Computing Spot Markets : A Real Options Approach.
In: Business & Information Systems Engineering. (2019) .
ISSN 1867-0202

Official URL: Volltext

Abstract in another language

The rapid standardization and specialization of cloud computing services have led to the development of cloud spot markets on which cloud service providers and customers can trade in near-real-time. Frequent changes in demand and supply give rise to spot prices that vary throughout the day. Cloud customers often possess temporal flexibility in executing their jobs up to an individual deadline. In this paper, we apply real options analysis (ROA), which is an established valuation method designed to capture according flexibility of action under uncertainty. We adapt and compare multiple discrete-time approaches that enable cloud customers to quantify and exploit the monetary value of short-term temporal flexibility. We contribute to literature by guaranteeing cloud job execution on variable-time requests in a single cloud spot market, whereas existing multi-market strategies may not fulfill requests when outbid. Analyzing a large set of example scenarios for the use of Amazon EC2 spot instances, we demonstrate that our approaches exploit existing savings potential to a considerable extent of up to 40 percent. Moreover, we demonstrate that ROA which explicitly considers time-of-day-specific spot price patterns outperforms traditional option pricing models and expectation optimization.

Further data

Item Type: Article in a journal
Refereed: Yes
Keywords: Cloud Computing; Spot Markets; Temporal Flexibility; Real Options Analysis; Decision Support
Institutions of the University: Faculties > Faculty of Law, Business and Economics > Department of Business Administration
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professorship Business Informations Systems and sustainable IT management
Faculties > Faculty of Law, Business and Economics > Department of Business Administration > Professorship Business Informations Systems and sustainable IT management > Professorship Business Informations Systems and sustainable IT management- Univ.-Prof. Dr. Gilbert Fridgen
Research Institutions
Research Institutions > Affiliated Institutes
Research Institutions > Affiliated Institutes > Fraunhofer Project Group Business and Information Systems Engineering
Research Institutions > Affiliated Institutes > FIM Research Center Finance & Information Management
Faculties
Faculties > Faculty of Law, Business and Economics
Result of work at the UBT: Yes
DDC Subjects: 000 Computer Science, information, general works > 004 Computer science
300 Social sciences > 330 Economics
Date Deposited: 27 Sep 2018 12:09
Last Modified: 28 Jan 2019 11:04
URI: https://eref.uni-bayreuth.de/id/eprint/45892