Analysis of a pricing method for elastic services with guaranteed GoS

Abstract

Service Providers (SPs), which offer services based on elastic reservations with a guaranteed Grade of Service (GoS), should know how to price these services and how to quantify the benefits in different scenarios. This paper analyzes a method for evaluating the price of a service based on elastic reservations with a guaranteed Grade of Service. The method works as follows: First, the SP determines the requirements of the service that wants to offer; Second, the SP evaluates the average rate of the accepted elastic reservations of the service with a guaranteed GoS; Third, the SP calculates the price that guarantees the GoS with an aggregate demand function that depends on a demand modulation factor of the elastic reservations that is the mean reserved bandwidth, Bres; and Finally, the SP obtains the optimum value of the elasticity of the reservations that gives the maximum revenue, and the required access bandwidth in this case. The paper not only applies the method to a class i of elastic reservations when a linear-based demand and a revenue function are selected, but it also analyzes the influence of each one of the considered parameters. This method could be extended to the case of multiple classes of independent and guaranteed elastic services, applying the method to each service with its estimated demand and revenue functions.