Cinar Kilcioglu

 

Faculty Candidate Cinar Kilcioglu [Graduate School of Business, Columbia]
Title Revenue Maximization for Cloud Computing Services
Date & Time Friday, February 5, 2016 at 10:30am
Place UCLA Anderson School of Management 
Room D310

 

Abstract
We study a stylized revenue maximization problem for a provider of cloud computing services, where the service provider (SP) operates an infinite capacity system in a market with heterogeneous customers with respect to their valuation and congestion sensitivity. The SP offers two service options: one with guaranteed service availability, and one where users bid for resource availability and only the "winning" bids at any point in time get access to the service. We show that even though capacity is unlimited, in several settings, depending on the relation between valuation and congestion sensitivity, the revenue maximizing service provider will choose to make the spot service option stochastically unavailable. This form of intentional service degradation is optimal in settings where user valuation per unit time increases sub-linearly with respect to their congestion sensitivity (i.e., their disutility per unit time when the service is unavailable) - this is a form of "damaged goods." We provide some data evidence based on the analysis of price traces from the biggest cloud service provider, Amazon Web Services.

Cinar Kilcioglu