Economics-Driven Resource Scalability on the Cloud

Virtualization of resources in cloud computing has enabled application developers to commission and recommission resources at will and on demand. This virtualization is a coin with two sides. On one hand, the flexibility in managing virtual resources has enabled application developers to more efficiently manage their costs; they can easily remove unnecessary resources or add resources temporarily when the demand suddenly increases. On the other hand, the volatility of such environment and the velocity with which changes can occur may have a greater impact on the economic position of a stakeholder and the business balance of the overall ecosystem. In this work, we recognise the business ecosystem of cloud computing as an economy of scale and explore the effect of this fact on decisions concerning scaling the infrastructure of web applications to account for fluctuations in demand. The goal is to reveal and formalize opportunities for economically optimal scaling decisions that take into account not only the cost of infrastructure, but also the revenue from service delivery and eventually the profit of the service provider.