Pricing IaaS: A hedonic price index approach

Abstract

Infrastructure as a Service (IaaS) is a rapidly expanding model of cloud computing. It includes control of computing resources, such as memory, computing power and storage capacity, satisfying the most fundamental IT needs for businesses on a usage-based payment model. Currently, there is an increased demand for IaaS services, which in turn feeds competition among cloud providers. As the price of cloud services depends on the supported characteristics and cloud providers do not adopt the same pricing model, the study of continuously evolving pricing schemes for such an innovative business model is a challenge. The work presented in this paper focuses on the construction of a price index based on a hedonic pricing model, emphasizing, besides basic functionality features, additional qualitative and quantitative attributes defined the Quality of Services provided. The aim of the study is to determine the importance of each feature and its effect on the final price. This is achieved by constructing the price index with data from 23 well-known IaaS cloud providers taking into account both functional and non-functional attributes of cloud computing services. In addition, a comparison of results between the present findings and our previous work is made, to assess the differences in estimates of each attribute contributory value to the shaping of IaaS pricing function.