Cloud Infrastructure Pricing Based on Utilization
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Solution Overview
Problem
Current cloud computing pricing models primarily focus on hardware usage, which can lead to inefficiencies and inaccuracies in costing, as they do not account for varying utilization patterns and purposes of cloud infrastructure, resulting in inflexible and potentially costly services for users.
Innovation Solution
Implementing a software provider system that prices cloud infrastructure based on both expected and actual utilization, using a pricing module to determine initial prices and adjust them dynamically based on actual usage, along with a metering tool to track and record resource utilization, allowing for tailored and flexible pricing structures.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Measurement precision
If cloud infrastructure is priced based on hardware usage, then pricing is simple to implement, but pricing accuracy deteriorates because it does not account for varying utilization patterns and purposes
Solution Approach 1:
The pricing system is segmented into multiple independent components: a pricing module that determines base prices, a utilization module that monitors actual usage, and a adjustment module that modifies prices based on utilization patterns. This segmentation allows the system to achieve accurate pricing while maintaining manageable complexity through modular design.
Solution Approach 2:
The system implements feedback loops where utilization data from actual cloud resource usage is continuously monitored and fed back to the pricing module. This feedback mechanism enables dynamic price adjustments based on real utilization patterns, improving pricing accuracy without requiring complete system redesign.
2Adaptability or versatility
If cloud resources are leased on a short-term basis, then flexibility is improved for users, but cost efficiency deteriorates due to inability to amortize software infrastructure costs
Solution Approach 1:
The system performs preliminary actions by establishing software infrastructure pricing in advance based on projected utilization patterns. This allows short-term cloud leasing to proceed with pre-calculated prices that incorporate anticipated usage, enabling cost amortization before actual usage occurs while maintaining leasing flexibility.
Solution Approach 2:
The pricing system transitions from static to dynamic by allowing price adjustments based on actual utilization patterns. This dynamic approach enables the system to maintain short-term leasing flexibility while adjusting prices to reflect actual usage, thereby improving cost efficiency through utilization-based amortization.
3Measurement precision
If utilization-based pricing is implemented, then cost accuracy is improved, but system complexity increases due to monitoring and adjustment mechanisms
Solution Approach 1:
The pricing module is designed with multi-functionality, serving both as a base price determiner and as a dynamic price adjuster based on utilization data. This universal design reduces overall system complexity by consolidating multiple functions into a single module rather than requiring separate specialized components.
Solution Approach 2:
The system implements self-service mechanisms where the pricing module automatically adjusts prices based on utilization feedback without requiring manual intervention. This self-service capability improves cost accuracy while minimizing the operational complexity that would otherwise be required to manage utilization-based pricing adjustments.
Data Source
AI summary
A software provider system can provide and price software infrastructure for a cloud to a cloud provider based on expected utilization and actual utilization of the cloud. The software provider system can provide the software infrastructure of the cloud and technical support for the software infrastructure under a varying price structure which is dependent on the expected utilization and the actual utilization of the software infrastructure. The software provider system can determine the initial price of the software infrastructure based on the expected utilization of the cloud and a purpose of the cloud. The software provider system can monitor the actual utilization of the software infrastructure, over time, in order to modify the initial price based on the actual utilization of the software infrastructure.