CLOUD COMPUTING, INFORMATION
FLOWS, AND MARKETS
Subir K. Chakrabarti
Department of Economics
IUPUI
Rajeev R. Raje
Department of Computer and Information Science
IUPUI
Network Support for Cloud

Commerce via Cloud Computing
 Allows
greater flexibility
 Allows Guaranteed and Continuous Access
 Alters the Information flow in the Network
 May lead to “Overall Efficiency Gains”

Analysis – Compare the net surplus and gains from
trade generated in a Network with Cloud
Computing vs. in a Network without Cloud
Computing
Factors in the Network Analysis

Without Cloud
Upfront Setup Costs
 Excess costs of maintenance of existing capacity.



Under utilization of Resources


E.g. capacity has to be maintained even when not in use
Resources devoted for computing may not be used to its fullest
extent
With Cloud
More efficient Usage of Resources
 Multi-tasking over the Same Resources
 Greater Information Flow

Economies of Scales in Cloud Computing

Lower per Unit Cost


Different Models of Service Delivery


This is the result of the large scale of Cloud Computing.
E.g., Direct User Consumption – Netflix
May Lower Entry Barriers, increase Competition, and
Social Welfare

The ease of renting state of the art computing capacity will
lower entry barriers-could lead to lower prices and higher
output.
QoS Issues in Cloud Computing

Many quality of service (QoS) issues are critical for
Cloud-based Systems
 E.g.,

Guarantees
Privacy and Security are Two QoS Parameters that
present Many Challenges in Cloud-based Scenarios
Questions to be Investigated



Is Welfare and Total Trade Greater Under Cloud
Computing when Compared with the Non-Cloud
Scenario?
Does Cloud Computing Lower Entry Barriers?
Does Cloud Computing Increase Competition and
Efficiency?
Questions to be Investigated



What are the Trade-offs for an Organization with
respect to QoS Parameters such as Security and
Privacy?
To What Extent should Organizations Invest in
Providing QoS Guarantees?
What Role will QoS Play in Selection of an
Appropriate Cloud-hosted Service from Many
Available Choices?
Possible Approaches and Challenges

Game of Attrition Between the Cloud Service
Providers, Adversaries and Users.
 How
to Formalize such a Game?
 Is there an Equilibrium in this Game?

Empirical Experimentation
 Simulation?
 Actual
Hosting of Services and Validation?