An Economic Model for Maximizing Profit of a Cloud Service Provider

For Infrastructure-as-a-Service, Cloud service providers, such as Amazon EC2 and Rackspace, allow users to lease their computing resources over the Internet, and invest their money into developing and maintaining the infrastructure. Hence, maximizing profit, right pricing, and rightsizing are vital elements to their business. To address these issues, we propose in this article an economic model for cloud service providers that can be used to maximize profit based on right pricing and rightsizing in the Cloud data centre. Total cost is a key element in the model and it is analyzed by considering the Total Cost of Ownership (TCO) of the Cloud.