Abstract
Cloud computing consumers wish to minimize their costs. Minimization depends on the technological infrastructure operated by providers. Cloud computing services are composed of services organized according to a hierarchy of software services, platforms and infrastructures. Providers offer software services as bundles of services which include software, platform and infrastructures. Bundling prevents customers from splitting their service purchases between different providers. Bundling policy is likely to change in the long run since it contradicts economic competition. This paper assumes that in the future market forces will push providers to act in a free competitive market. The proposed model is aimed at the potential customer who wishes to find the optimal combination of service providers which minimizes his costs. The model suggests two possible strategies for implementation in organizations.
TopBackground
Comparing CC pricing models is a complicated task due to variance among providers’ services and structure of tariff tables. Researchers found that cost saving is the strongest incentive for organizations considering CC adoption (Yung-Ming & Chia-Ling, 2012). CC services are usually sorted to three groups: SaaS (Software as a service), PaaS (Platform as a Service) and IaaS (Infrastructure as a Service), each service belongs to a specified group, and is offered for specific prices.
Key Terms in this Chapter
Software as a Service (SaaS): A cloud computing model in which the provider offers software applications aimed for remote usage by IT professionals and business users. SaaS applications includes applications such as CRM and ERP.
Transparency: Transparency of a cloud computing service is the ability of the system to provide visibility of the structure and behavior of a process. Transparency leads to consumers’ trust in the supplied service.
Infrastructure as a Service (IaaS): A cloud computing model in which the provider offers remote hardware and basic software services such as operating systems, database management systems and utilities.
Platform as a Service (PaaS): A cloud computing model in which the provider offers software components such as compilers and debuggers which are used for application development.
Competition: Companies compete each other over the same group of customers. Competition causes commercial firms to develop new services, giving consumers better services. The greater selection causes lower prices for the services, compared to a market with limited competition.
Cloud Computing: Cloud computing is the delivery of on-demand computing services over the internet on a pay-for-use basis, with minimal consumer setup efforts.
Bundling: Product bundling is offering a package of several products for sale as one combined product. Bundling can be regarded as an unfair use of market power because it limits consumers’ choices.