Delay and Price Differentiation in Cloud Computing: A Service Model, Supporting Architectures, and Performance

Many cloud service providers (CSPs) provide on-demand service at a price with a small delay. We propose a QoS-differentiated model where multiple SLAs deliver both on-demand service for latency-critical users and delayed services for delay-tolerant users at lower prices. Two architectures are considered to fulfill SLAs. The first is based on priority queues. The second simply separates servers into multiple modules, each for one SLA. As an ecosystem, we show that the proposed framework is dominant-strategy incentive compatible. Although the first architecture appears more prevalent in the literature, we prove the superiority of the second architecture, under which we further leverage queueing theory to determine the optimal SLA delays and prices. Finally, the viability of the proposed framework is validated through numerical comparison with the on-demand service and it exhibits a revenue improvement in excess of 200%. Our results can help CSPs design optimal delay-differentiated services and choose appropriate serving architectures.