Pricing strategy for cloud computing: A damaged services perspective
A hybrid strategy is shown to outperform a one-service-only strategy in most cases. A hybrid strategy performs well especially when clients are sensitive to services interruptions or when task values are highly differentiated. The presence of interruptions serves as a quality differentiator between the two types of services offered by the vendor, assuring the efficacy of the hybrid strategy. The presence of interruptions also provides the vendor with resource reallocation flexibility. If the vendor introduces a capacity limit in its contract, clients need to adopt a dynamic-threshold submission strategy to reserve limited computing resources for future high-value jobs. The vendor is able to use the capacity limit as a tool, together with the hybrid strategy, to improve its profit.
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