A Model for Determining the Optimal Capacity Investment for Utility Computing

Abstract

Utility computing has emerged as a new IT model for future computing and storage resource management for enterprises. Utility computing has drawn attention from enterprise customers who seek to reduce upfront IT investment and enhance computing agility. Major IT service providers envisioned that the commoditization and standardization of IT resources would usher in the shift of the IT paradigm towards utility computing. In this paper, a decision model is presented for determining the optimal capacity of a utility computing which maximizes the total profit for a utility computing service provider. The model considers both capacity investment cost and demand level, and derives closed from solutions for the investment.