Patent ID: 7693762

Claim:
A method in a computer for providing a pricing algorithm for a device, the device being a hardware resource or a software application, comprising: receiving by the computer estimates of service usage for the device including a history of past usage of the device; receiving by the computer a usage-based schedule of prices for the device; and in response to the receiving the estimates of service usage and the receiving the schedule of prices: calculating by the computer a model volatility of service usage relating to statistical variation in expected service usage of the device, the calculating of the model volatility including averaging logarithms of past usage values as indicated by the history of past usage of the device, and calculating a variance of the logarithms of the past usage values, and calculating by the computer a revenue estimate for the usage-based schedule of prices that factors in discounts by looping over periods of usage and performing: setting a price for the period to a base price; determining average usage for the period; and when the average usage for the period exceeds a discount usage, applying a discount to reset the price.