Chapter 11 - Cloud Operator Games

Abstract

The emerging market of public and private cloud infrastructure benefit the end users, as it reduces their costs, introduces new efficient services and provides variety of products. Currently, there are significant efforts to standardize customer interfaces of public clouds in order to realize better interoperability between various clouds. In this chapter, we introduce a game-theoretical model, which describes the behavior of a hybrid cloud market. Additionally, based on simulation, we explore the effect of interoperability to the market efficiency. In particular, we concentrate on the effect of the number market players, switching cost, and pricing. We study such a three-level market structure. Our goal is to find Nash equilibrium of prices in this market as well as market influence on the end users. We observe that new resources at public clouds positively affect the market from the end-user perspective. We also consider a market where two large companies provide services to the population through cloud virtual operators buying companies' services and reselling them to clients. Each large company assigns a price for selling its services to virtual operators. Also the number of its clients and its resource (a characteristic of company's attractiveness for clients) are known. The game process is a repetition of two-step games where virtual operators choose companies and prices for their services. Each virtual operator needs to choose a company whose services he is going to sell and also to define a price for the services to be sold to clients. Each virtual operator establishes the probability to choose the company and the price for services, taking into account that the partition of company's clients choosing a given operator is defined by the Hotelling specification. At each step, each virtual operator seeks to maximize his payoff. We find the optimal strategies of the virtual operators and also explore the following question. Does the system achieve some stationary state in this repeated two-step game or a repeating cycle of states is formed instead?