Dynamic Resource Allocation in the Cloud with Near-Optimal Efficiency

Problem definition: Cloud computing is recognized as a critical driver of information technology–enabled innovations. The operations management (OM) community, however, has not been exposed enough to the essential operations problems that arise from the management of cloud value chains. Academic/practical relevance: In this paper, we examine recent research on cloud value chains and explore future research opportunities from an OM perspective. In particular, we focus on major operations management challenges facing a cloud provider in three problem domains: (1) cloud computing resource management, (2) pricing in the cloud computing marketplaces, and (3) capacity planning and management of cloud supply chains. Methodology: We describe prevalent business models and management practices in the cloud value chains, discuss recent research from OM that falls into each of the three problem domains mentioned, and point out opportunities for future research. Results: We note that cloud computing operations are driven by demand that exhibits distinct characteristics, including complex workflow, demand redundancy, multifeatured characteristics, multidimensional resource requirement, and nonstationarity. On the supply side, cloud computing operations also exhibit distinct characteristics, including heterogeneous resources, packing constraints, preconfigured (“bundled”) supply, technology risks, and cost uncertainty. These characteristics of demand and supply are not all prevalent in other operations. Managerial implications: Cloud computing operations not only share many features with classic OM problems, but also bring new challenges and innovative business models. Thus, OM tools and research have the potential to provide vital insights into cloud computing operations and impact management practices in the cloud industry, which, in turn, can stimulate much innovative research from the OM perspective. Supplemental Material: The online appendix is available at https://doi.org/10.1287/msom.2022.1178 .

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Technical Note—Cloud Cost Optimization: Model, Bounds, and Asymptotics

Qu,

Dawande,

Janakiraman

2024

Operations Research

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A Near-Optimal Capacity and Scheduling Policy for Cloud Users In “Cloud Cost Optimization: Model, Bounds, and Asymptotics,” Qu, Dawande, and Janakiraman study a long-term, dynamic resource-optimization problem for firms managing various cloud resources to process incoming computing tasks over time. Cloud resources vary in attributes, such as computing speed, memory, accelerators, and storage, tailored to different computing tasks, such as data warehousing, scientific computing, machine learning, and data processing. Firms can choose reserved resources for long-term commitments at lower costs or on-demand resources for flexibility at a higher price. Firms face three key trade-offs: the cost disparity between reserved and on-demand resources, the variation in resource attributes affecting performance and cost, and the challenge of balancing delay and resource costs. We propose an asymptotically optimal policy, demonstrating its effectiveness through a detailed numerical study based on Amazon Web Services data.

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Dynamic Resource Allocation in the Cloud with Near-Optimal Efficiency

Cited by 5 publications

References 21 publications

An analysis of performance, pricing, and coordination in a supply chain with cloud services: The impact of data security

An analysis of performance, pricing, and coordination in a supply chain with cloud services: The impact of data security

Cloud Computing Value Chains: Research from the Operations Management Perspective

Technical Note—Cloud Cost Optimization: Model, Bounds, and Asymptotics

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