Faculty of Economics and Business Administration Publications Database

Price Comparison for Infrastructure-as-a-Service

El Kihal, Siham
Schlereth, Christian
Year: 2012
Keywords: Cloud Computing; Infrastructure-as-a-Service; Pricing; Hedonic Pricing; Pricing Plan Comparison

Today’s pricing of infrastructure-as-a-service is not transparent because some providers, such as Google, charge separately for each service characteristic (e.g., $50 per CPU or $15 per GB of memory per month) and let customers freely configure the service. In contrast, competitors like Amazon, Microsoft, and IBM only offer predefined bundles (e.g., 4 GB of memory, 400 GB of storage, and 2 CPUs for $140 per month). These different types of pricing plans make price comparisons very difficult. The aim of this study is to increase price transparency among providers by analyzing two price comparison methods. The first method is the well-known "hedonic pricing", which decomposes each provider''s billing into the contributing values of the product´s characteristics. The second is a newly developed method, called PriCo ("Pricing plan Comparison"), which in addition considers offers from competitive providers. We employ the two methods in an empirical study, which compares the pricing of the infrastructure-as-a-service providers Google, Microsoft, Amazon, IBM, and Terremark. The insights gained help customers to better identify the least expensive provider for their needs. The proposed methods also help providers to better understand and position their pricing in the market.