An Online Mechanism for Resource Allocation and Pricing in Clouds

Cloud providers provision their various resources such as CPUs, memory, and storage in the form of virtual machine (VM) instances which are then allocated to the users. The users are charged based on a pay-as-you-go model, and their payments should be determined by considering both their incentives and the incentives of the cloud providers. Auction markets can capture such incentives, where users name their own prices for their requested VMs. We design an auction-based online mechanism for VM provisioning, allocation, and pricing in clouds that considers several types of resources. Our proposed online mechanism makes no assumptions about future demand of VMs, which is the case in real cloud settings. The proposed online mechanism is invoked as soon as a user places a request or some of the allocated resources are released and become available. The mechanism allocates VM instances to selected users for the period they are requested for, and ensures that the users will continue using their VM instances for the entire requested period. In addition, the mechanism determines the payment the users have to pay for using the allocated resources. We prove that the mechanism is incentive-compatible, that is, it gives incentives to the users to reveal their actual requests. We investigate the performance of our proposed mechanism through extensive experiments.