Modeling and Economic Analysis of the Cloud Brokering Platform Under Uncertainty: Choosing a Risk/Profit Trade-off

Gaivoronski, Alexei A.; Strasunskas, Darijus; Nesse, Per Jonny; Svaet, Stein; Su, Xiaomeng

doi:10.1287/serv.2013.0047

Cited by 13 publications

(6 citation statements)

References 26 publications

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“…Нехай  − випадкова подія з множини  можливих майбутніх станів, яка стається з деякою ймовірністю   . Тоді замість цільової функції (11) максимізується очікувана (expected) поточна вартість…”

Section: )unclassified

Decision Making Models on the Market of Cloud Services

Горбачук

Dunaievskyi

Сулейманов

et al. 2021

Cybernetics and Computer Technologies

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Introduction. Optimization can be applied in developing profitability management tools for a cloud service broker working according to a certain business model. On behalf of the managing telecommunications holding company (telecommunications operator), this broker integrates, aggregates and configures software and data storage services of third-party Internet software vendors. Such a broker receives only fixed commissions from this company, based on the subscription fee, but does not pay royalties to an Internet software vendor and does not receive payments from the sale of service packages. The purpose. The cloud broker faces the problem of limited human resources required to carry out the relevant legal, technical and economic activities. In addition, the broker faces the problem of uncertainty in sales, service prices, the share of resource use, or the risk of losing operational and financial goals. Results. To run a broker?s business efficiently, one needs to find services and their bundles that increase profitability and reduce financial risk by solving certain optimization problems. Information on such services is needed to support negotiations on fixed and variable commissions, as well as to prioritize services and their packages to be provided. Thus, for the cloud services broker, both profitability management tools and services portfolio development tools are useful. In general, a cloud service broker is an organization that negotiates the relationships between cloud service clients and Internet software vendors. Cloud broker can be created on the basis of different business models regarding the type of service (platform, infrastructure, software), type of clients (enterprise, household), functions performed (identity management, accounting, billing, location, etc.), the degree of rebranding, measures of aggregation of services and other criteria. Conclusions. Different cloud brokers have different attitudes to choice of important solutions for their businesses. Solutions can relate to pricing, capacity planning and utilization in combination with service quality, security, scalability and other issues. Keywords: optimization, portfolio, uncertainty, Boolean variables, revenue generation.

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Section: )unclassified

Decision Making Models on the Market of Cloud Services

Горбачук

Dunaievskyi

Сулейманов

et al. 2021

Cybernetics and Computer Technologies

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“…Therefore, the selection of the broker–carrier scenario does not limit the subsequent analysis. Nevertheless, we have analysed the case of pure broker with OptiCloud and have found that it is inferior to combined broker/carrier for high quality service .…”

Section: Qualitative Description Of Cloud Computing Businessmentioning

confidence: 99%

Assessment and optimisation of business opportunities for telecom operators in the cloud value network

Nesse

Svaet

Strasunskas

et al. 2013

Trans. Emerging Tel. Tech.

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Cloud computing represents a major change in how resources of information technology are delivered and consumed and will influence the telecom industry, its future services, business offerings and economics of the telecommunication. New revenues potentials from mediating cloud‐based services are however less discussed, as well as the commonly accepted and completed methodology for this purpose is lacking. The objective of this paper is to clearly identify recommended roles for telecommunication companies (telcos) in the cloud value chain and to present a model for assessing and optimising innovative business opportunities. In particular, we show how the portfolio theory of modern investment science supports risk management in operation of telecom company‐based cloud carriers for service brokering.We recommend a combined broker and carrier role to be a preferred cloud business model for a telco. Such combination is expected to represent the best value proposition for competing against cloud providers and ICT integrators. Further quantitative analysis indicates significant business benefits from differentiating and optimising provision of carrier grade and best effort network connectivity types for a given bundle of cloud services. This implies an efficient use of telco assets and satisfies an increasing demand for network performance in the business market.The novelty of the paper is the developed quantitative optimisation model as well as the analytical identification of the preferred telco role in cloud value network. Practical application of the research may improve dimensioning of technological assets, leading to higher cost efficiency and possibly higher degree of customer satisfaction. Copyright © 2013 John Wiley & Sons, Ltd.

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“…Markowitz has pioneered modern financial portfolio theory, and in the recent years, financial portfolio optimization has developed into a rich body of models and applications . In the context of modern communication and information services, the portfolio theory approach and business optimization has been used by Gaivoronski and Zoric, Nesse et al, and Gaivoronski et al…”

Section: Introductionmentioning

confidence: 99%

“…Markowitz 10 has pioneered modern financial portfolio theory, and in the recent years, financial portfolio optimization has developed into a rich body of models and applications. 11,12 In the context of modern communication and information services, the portfolio theory approach and business optimization has been used by Gaivoronski and Zoric, 13 Nesse et al, 14 and Gaivoronski et al 15 The development of the model described below is the outcome of a research process with case study characteristics. 16 In order to understand the cloud service providers' role in the value chain, to identify relevant cost and income objects and their hierarchy, to elaborate the model structure, and to finally assign relevant financial data, we conducted several semistructured interviews with key persons both at the telecommunication holding company and the affiliated cloud service provider.…”

Section: Introductionmentioning

confidence: 99%

Optimization‐based profitability management tool for cloud broker

Becker

Gaivoronski

Nesse

2018

Trans Emerging Tel Tech

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This paper represents a model that supports the choice of efficient service portfolios at a cloud service broker. Among the many types of different cloud service brokers, we focus on a firm that offers service bundles that are composed from different services of different internet software providers. The necessary integration, aggregation, and customization of services can be time consuming and costly. Whenever the cloud broker can choose from many service combinations, but has limited human resources with critical time to market, it is essential to prioritize some of the service bundles, markets, services, and internet software providers. The purpose of this paper is to facilitate this kind of decision. Moreover, both the time and resources required for creating service offerings and the customers' demand for these service bundles are subject to uncertainty. Because of this uncertainty, a cloud broker needs to be guided to potential service portfolios that give the best trade‐off between risk and profitability. Our model helps the decision maker to identify efficient service portfolios, ie, service portfolios that for a given risk have the highest profitability or for a given profitability have the lowest risk. Our paper shows the application of this model to a cloud broker that mediates mainly software as a service bundled with mobile subscriptions for telephony (calling and messaging) and internet access. The model is inspired by the ideas from financial portfolio optimization and product‐mix decisions under scarce resources. The model corresponds to a linear stochastic optimization problem with an objective function that balances risk and profitability.

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Modeling and Economic Analysis of the Cloud Brokering Platform Under Uncertainty: Choosing a Risk/Profit Trade-off

Cited by 13 publications

References 26 publications

Decision Making Models on the Market of Cloud Services

Decision Making Models on the Market of Cloud Services

Assessment and optimisation of business opportunities for telecom operators in the cloud value network

Optimization‐based profitability management tool for cloud broker

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