# ARAAC: A Rational Allocation Approach in Cloud Data Center Networks
## 1 Introduction and Problem Statement
To handle this, and to maintain acceptable service levels while allowing for a win-win approach, managers of cloud-DCNs need to adopt new models that guarantee: (1) efficient resource utilization, (2) satisfying profit targets, and (3) the tenants' quality of service (QoS) requirements. The authors of [4] proposed an allocation model that attempts to model an auction scenario played by a cloud provider (i.e., the service seller) and a set of tenants (i.e., the service consumers). In this, the allocation process follows a multi-stage uniform price sealed bid approach to allocate the services (i.e., cloud resources) among the bidders. The allocation function is formulated on the basis of the bidders' resource requests and their offered bid prices. As long as there is enough bandwidth to provide, the model chooses those bidders who offer bid prices higher than a predefined _market clearing price_. However, to accommodate for more requests, the chosen bidders may not receive the full amount of resources they requested. Instead, the allocation might be for partial amounts only. This is motivated by the claim that such an allocation scenario can maximize the provider's profit. We believe that the proposal of [4] has the following limitations:* Allocating the network resources on the basis of the market clearing price may help the cloud-DCN provider avoid losses, however, it can never achieve profit maximization. Indeed, knowing that the offered bid prices will not be considered for the charging issues, bidders will always tend to offer high bid prices simply to win the auction. Then all those who win the auction pay the same price defined by that _market clearing price._
* The absence of a _competition environment_ in such an allocation scenario can motivate exaggeration actions. Bidders with no incentives to truthfully reveal their true needs and real resource requirements, may tend to exaggerate their needs and ask for more resources. Living with such huge growth in the global network traffic, exaggerated actions may impose _real waste_ for the available cloud resources. * Cutting portions from the requested network resources contradicts the _tenants' satisfaction_ goals. In truth, those bidders who receive only portions of what they have asked for may not be satisfied as this may affect their _QoS requirements_. In this work, we propose A Rational Allocation Approach in Cloud data center networks (ARAAC) that provides a different auction scenario to allocate the cloud-services among a set of service tenants. In ARAAC, we chose to adopt the second-best price (SBP) sealed-bid auction. This allows for an environment of competition, through which, the service tenants (i.e., bidders) compete to win the allocation auction through their offered bid prices. In this way, the auction strategy can: (1) maximize the provider's profit, and (2) enforce an incentive compatible solution. Moreover, to better utilize the providers' resources and to suppress any waste of the cloud-DCN resources, in ARAAC, we propose injecting an additional factor into the selection process of the candidate service tenants. This new factor that we have called a _reputation_ provides information about the historical behaviour of the tenants in the context of resource utilization history. Hence, those tenants with poor utilization records are excluded from the auction regardless of their offered prices, and those with good records and reasonable price offers stay and get charged with prices less than what they offered in their bids. Consequently, service tenants will be motivated to ask for no more resources than their real needs, as this would lead to poor utilization rates that create low reputation records in the future, thus depriving them from participating in the coming allocation auctions. In summary, the contribution of ARAAC comes from the following:  
* ARAAC provides for _strategy-proofness_[5] and an _incentive-compatible_[6] solution that encourages truthful reveals for the required cloud-DCN resources, thus leading to high utilization rates.