Professional Documents
Culture Documents
TMP 30 DE
TMP 30 DE
X, XXXXXXX 2014 1
Abstract—We present a cloud resource procurement approach which not only automates the selection of an appropriate cloud vendor
but also implements dynamic pricing. Three possible mechanisms are suggested for cloud resource procurement: cloud-dominant
strategy incentive compatible (C-DSIC), cloud-Bayesian incentive compatible (C-BIC), and cloud optimal (C-OPT). C-DSIC is
dominant strategy incentive compatible, based on the VCG mechanism, and is a low-bid Vickrey auction. C-BIC is Bayesian incentive
compatible, which achieves budget balance. C-BIC does not satisfy individual rationality. In C-DSIC and C-BIC, the cloud vendor who
charges the lowest cost per unit QoS is declared the winner. In C-OPT, the cloud vendor with the least virtual cost is declared the
winner. C-OPT overcomes the limitations of both C-DSIC and C-BIC. C-OPT is not only Bayesian incentive compatible, but also
individually rational. Our experiments indicate that the resource procurement cost decreases with increase in number of cloud vendors
irrespective of the mechanisms. We also propose a procurement module for a cloud broker which can implement C-DSIC, C-BIC, or
C-OPT to perform resource procurement in a cloud computing context. A cloud broker with such a procurement module enables users
to automate the choice of a cloud vendor among many with diverse offerings, and is also an essential first step toward implementing
dynamic pricing in the cloud.
Index Terms—Cloud computing, mechanism design, cloud broker, resource procurement, reverse auctions, multiattribute auctions,
dynamic pricing
1 INTRODUCTION
of a sound theoretical basis for dynamic pricing. The default computing a weighted QoS score. This step is called
agreement offered by a vendor often contractually benefits normalization. If normalization is not done, then it is not
the vendor but not the user, resulting in a mismatch with possible to compare different QoS specifications. The cloud
user requirements [7]. Hence, this kind of pricing favors the broker implements one of cloud-dominant strategy incen-
cloud vendor. Also, there is no clear commitment on SLAs tive compatible (C-DSIC), cloud-Bayesian incentive compa-
[7]. Dynamic pricing is the solution for these kind of tible (C-BIC), or cloud-optimal (C-OPT) mechanisms. The
problems [8]. winner is determined based on the mechanism implemen-
Bichler et al. [9] state that uncertainty about the prices of ted. The cloud broker notifies both winner and user. Finally,
goods and lack of knowledge about market participants are the cloud broker pays money to the cloud vendors
obstacles to dynamic pricing. Auctions are in particular according to the payment function of the mechanism. This
helpful in this kind of situation [9], [10], [11]. If the buyer is is called the procurement cost.
an auctioneer and the suppliers are bidders, then the We assume that cloud vendors are selfish (interested in
auction is called a reverse auction. Reverse auctions are maximizing their own profits) and rational (able to appro-
widely used across many industries, and also especially by priately calculate values and derive choices based on
governments to procure resources. Reverse auctions are available information, rather than relying merely on past
preferred over other auctions for procuring resources experience). Hence, there is a possibility of overbidding and
because competitive bidding in these type of auctions underbidding [19]. As is standard, our assumption of
reduces procurement costs and limits the influences of selfishness is limited only to the pricing aspect, but we
undesirable factors like nepotism and political ties [12]. assume that vendors are truthful in technical matters; for
Resource procurement can be accomplished using con- example, if a cloud vendor claims 99.99 percent uptime for a
ventional methods [13], [14], [15] and economic models [16]. service, then we assume that this is true information.
The conventional models assume that resource providers Incentives are offered to the cloud vendors to make truth
are nonstrategic [13], [14], [15], whereas economic models revelation the best strategy. The right amount of incentive
assume that resource providers are rational and intelligent. offered to induce truth is called incentive compatibility. There
In conventional methods, a user pays for the consumed are two types of incentive compatibility: dominant strategy
service. In economic models, a user pays based on the value incentive compatibility (DSIC) and Bayesian incentive compat-
derived from the service [16]. Hence, economic models are ibility (BIC). These are the only ways of implementing
more appropriate in the context of cloud services. incentive compatibility. In DSIC, the optimal strategy for
An important feature of economic models is the each cloud vendor is to report true valuation irrespective of
distribution of incentives to bidders, which are cloud other cloud vendor’s valuation. In BIC, the optimal strategy
vendors in our domain. However, this means that cloud is to report true valuation only if all the other cloud
vendors may not act truthfully and may seek to maximize vendor’s report true valuation.
their incentives using improper behavior. Game-theoretic In this work, we present three possible mechanisms:
models cannot enforce the structure in games. Mechanism
design enables the social planner to design the game . C-DSIC: This is a dominant strategy incentive
according to his wish. So the social planner can implement compatible mechanism. It is based on the VCG
strategies to motivate participants to act truthfully. mechanism (see [20] for an explanation of the VCG
The important contributions of this work are: mechanism). In C-DSIC, the best strategy for a cloud
vendor is to bid truthfully. The ratio of cost and QoS
. procurement mechanisms for implementing dy- is computed for each cloud vendor. The cloud vendor
namic pricing, and with the lowest ratio of cost to QoS is the winner. The
. novel procurement module based on mechanism payment rule is based on the VCG mechanism. The
design for a cloud broker. user pays the price as per the next lowest bid. C-DSIC
Dynamic pricing increases user welfare, facilitates is a low-bid Vickrey auction. C-DSIC achieves
healthy competition among vendors, and increases the allocative efficiency (objects are allocated to the cloud
efficiency of cloud resource usage [17]. Auctions are one vendors who value them most) and individual
way of implementing dynamic pricing [9]. Dynamic pricing rationality (cloud vendors get negative payoff if they
is not only advantageous for cloud users but also max- withdraw from the auction) but it is not budget
imizes the profit for vendors [18]. The mechanisms balanced (there is no external funding in the system). If
proposed in this paper are based on reverse auctions and all cloud vendors use the same probability distribu-
are more appropriate for implementing dynamic pricing. tion of price and QoS, then C-DSIC is to be preferred.
The procurement module enables the cloud broker to . C-BIC: This mechanism is based on the dAGVA
automate resource procurement. In our procurement mod- mechanism [21]. In C-BIC, each cloud vendor
ule, the user sends the specifications to the cloud broker and contributes a participation fee. This money is used
requests for resources. The cloud broker sends the user for paying other cloud vendors. Hence, C-BIC is
specification to all cloud vendors. The cloud vendors budget balanced and allocative efficient. In this mechan-
respond with cost and QoS parameters of their services. ism also, the vendor with lowest cost and QoS ratio
We do not consider implementation issues like caching, is declared the winner. The procurement cost for
refresh, and so on, of cost and QoS by the broker. The cloud the user is less here compared with C-DSIC. C-BIC
broker assigns weights for different QoS parameters using does not satisfy individual rationality but achieves
analytic hierarchy process (AHP), which are scaled before allocative efficiency and budget balance. C-BIC is
PRASAD AND RAO: A MECHANISM DESIGN APPROACH TO RESOURCE PROCUREMENT IN CLOUD COMPUTING 3
the second highest price. Lin et al. [42] also introduce the prove that the minimum approximation ratio achieved in
concept of off-peak and peak pricing periods. They assume deterministic polynomial time ascending auctions is 34 . They
that all users behave truthfully, which is not always the case also prove that if the dependence between the agents’
in the real world. They also do not discuss the enforcement valuations is bounded, then the approximation ratio
of the truthfulness property. Narahari et al. [19] propose achieved is close to 1. Chandrashekar et al. [48] present
mechanisms for procurement of resources for sweep type the state of the art in the area of auction mechanisms for
jobs in Grid. These mechanisms cannot be applied directly electronic procurement.
to the cloud. In cloud, the resources are not limited to sweep Ronen and Lehmann [49] present a generic method to
type jobs. They can be SaaS, PaaS, IaaS, and so on. This construct optimal multiattribute auctions, a method that can
work makes use of existing mathematical models like be applied to various multiattribute auction designs.
Vickrey auction, and so on. We apply these models to Wang et al. [50] present two kinds of multiattribute
design reverse auctions to procure cloud resources. auction models based on the scoring rule and bidding
objective functions.
2.2 Mechanism Design
The main goal of mechanism design is to implement system-
wide solutions to problems that involve multiple self-
3 SYSTEM MODEL
interested agents, given private information about their Our system model is based on Narahari et al. [19]. In game
preferences [19], [20]. It can also be viewed as the design of a theory, we assume that players are rational and have
framework of protocols that would foster particular ways of common knowledge and private information. Rationality
interaction among agents with known behavioral character- implies that goal is to maximize payoff. In our model, cloud
istics, to bring about a globally desirable outcome [19]. vendors are rational. Hence, cloud vendors are risk neutral.
The work of Nisan and Ronen [43] is considered seminal The concepts of risk neutral and quasilinear are described in
in the field of algorithmic mechanism design. They success- detail elsewhere [21].
fully use the concepts of mechanism design [20] for solving Each cloud user has resource requirements. The users
scheduling problems. perform reverse auctions for procuring resources (which are
In nonstrategic social choice theory, agents have pre- also called procurement auctions). Cloud vendors offer
ferences but they do not try to obfuscate them to maximize resources, but with varying costs and quality metrics. The
their utility [21]. Mechanism design is a strategic version of goal of the cloud user is to minimize the total cost of
social choice theory where agents try to maximize their procuring resources without compromising quality of
individual payoffs [21]. The goal of mechanism design is to service. To minimize the procurement cost, it is necessary
design social choice and payment functions. We refer to for the cloud user to know the real costs of cloud vendors.
standard texts [19], [20], [21] for an in-depth treatment of A user announces its specifications for desired resources
mechanism design. and quality of service to all cloud vendors, with the broker
Narahari et al. [19] apply concepts of mechanism design acting as a middleman. The cloud vendors decide whether
to solve sponsored search auctions and resource procure- to participate in the auction based on the user information
ment in grid computing. They design three mechanisms for and submit their bids to the broker. The broker aggregates
procuring resources in Grid. The mechanisms presented are the bidding information and selects the appropriate cloud
incentive compatible and optimal. They also design in- vendor. Cloud vendors are rational and intelligent. Hence,
centive compatible broadcast protocols for ad hoc networks. one of them might bid with a false valuation to maximize its
utility. The goal of providing incentives is to encourage
2.3 Optimal Multiattribute Auctions truthful bidding.
We refer to [11] for a comprehensive introduction to auction
theory, including the various types of auctions, their 3.1 QoS Scaling
characteristics, and their applications in computing. Cloud vendors provide different resources with different
In traditional auctions, only price is considered. It is quality-of-service levels. Hence, the QoS parameters are not
difficult to account for nonnumerical attributes like quality, the same for all cloud vendors. For example, one cloud
and so on, which are important in the real world. On the vendor may guarantee 99 percent uptime and another
other hand, multiattribute auctions take attributes like 99.9 percent uptime, and so on. Also, the QoS parameters
quality, and so on, into account. Hence, multiattribute can be either positive or negative. A QoS parameter is called
auctions are interesting and challenging. Che [44] proposes positive if a higher value of that parameter denotes a higher
a scoring rule (weights for each attribute) to compute a final quality of service (i.e., a higher value of the parameter is
score. Once the final score is computed, then the traditional
more desirable than a lower one—for example, network
auction is performed. Branco [45] describes the properties of
bandwidth), and it is called negative if a lower value of the
optimal multiattribute auctions and proposes a two-stage
procurement mechanism. In the first stage, the winner is parameter denotes a higher quality of service (i.e., a lower
determined. In the next stage, bargaining is performed for value of the parameter is more desirable than a lower
desired quality. Bichler and Kalagnanam [46] analyze the one—for example, network latency).
problem of winner determination in the case of multiple The comparison of different QoS parameters is a
sourcing. They also extend multiattribute auctions for common problem in multiple criteria decision making.
configurable offers. According to the authors, multiattribute Zeng et al. [51] use a well-known method called simple
auctions achieve higher market efficiency compared to additive weighting (SAW) [52] to perform comparison of
traditional single attribute auctions. Ronen and Saberi [47] quality attributes of web services. Also, Mohabey et al. [53]
PRASAD AND RAO: A MECHANISM DESIGN APPROACH TO RESOURCE PROCUREMENT IN CLOUD COMPUTING 5
TABLE 1 TABLE 2
AHP Score Table QoS Parameters and Weights
4 PROPOSED MECHANISMS
4.1 Cloud-Dominant Strategy Incentive Compatible
Mechanism
Dominant strategy incentive compatibility is one of the
methods for truth elicitation. In this, truth telling is the best
response of the participants, irrespective of other partici-
pants’ strategies [20]. Let fðbÞ^ ¼ ðgðbÞ;
^ h1 ðbÞ;
^ . . . ; hn ðbÞÞ
^ be
the social choice function in the C-DSIC mechanism which
implements dominant strategy incentive compatibility. gðbÞ ^
^
is the allocation rule that represents the winner. hi ðbÞ is the The time complexity of this algorithm is OðnÞ. In the first for
payment received by the cloud vendor i. If hi ðbÞ ^ > 0, then loop, the minimum cost per QoS is calculated. The participant
payment is received by the cloud vendor i; otherwise, i pays with lowest cost over QoS is the winner. The payment
money to the user. function hi is computed based on the VCG mechanism
We design a dominant strategy incentive compatible according to (4). The C-DSIC algorithm is a low-bid Vickrey
mechanism. According to the Gibbard-Satterthwaite im- auction, and hence, only the winner gets a payment. The other
possibility theorem [57], [27], only dictatorial social choice participants do not receive any remuneration.
functions are DSIC. Hence, in a general environment, DSIC The properties satisfied by C-DSIC are:
cannot be implemented. But social choice functions are
. Dominant strategy incentive compatibility. The C-DSIC
nondictatorial in a quasilinear environment [20]. The VCG mechanism is based on VCG mechanism. VCG is
mechanism [20] is DSIC in a quasilinear environment. We DSIC and, hence, the proposed mechanism is DSIC.
assume that cloud vendor’s aim is to maximize profit. . Individual rationality. The payments received by the
Hence, cloud vendors are risk neutral, and this implies cloud vendors are greater than or equal to zero. In
PRASAD AND RAO: A MECHANISM DESIGN APPROACH TO RESOURCE PROCUREMENT IN CLOUD COMPUTING 7
this mechanism, cloud vendors never pay the user The C-BIC is presented in Algorithm 2 below.
and have a nonnegative payoff.
. Allocative efficiency. The winner is the cloud vendor
with lowest cost over QoS. Hence, C-DSIC is
allocative efficient.
Iyengar and Kumar’s [12] is an important work with This multidimensional attribute of cloud vendors makes
respect to building an optimal mechanism. They prove a set this a nontrivial problem. In particular, we cannot apply
of theorems to prove a mechanism as optimal. We use these traditional optimizing schemes in this case [12], [19], [60].
theorems and prove that our C-OPT mechanism is optimal. The properties of optimal procurement mechanism [12]
Let Xi and Ti be the expected allocation and payment, with capacitated suppliers are:
respectively. Iyengar and Kumar [12] give the following
definitions: 1. The expected allocation Xi ðci ; qi Þ is nonincreasing in
the cost parameter ci 8 suppliers.
Definition 4.1. The offered expected surplus for a procurement
mechanism (g,h) is defined as i ð^ ci ; q^i Þ ¼ Ti ð^
ci ; q^i Þ
2. The offered surplus R c i ðc^i ; q^i Þ is of the form i ð^
ci ;
q^i Þ ¼ i ð
c; q^Þ þ c^i Xi ðy; q^i Þ.
c^i Xi ð^
ci ; q^i Þ. It is the expected transfer payment when the
vendor i bids ð^ ci ; q^i Þ. The proofs of the above properties can be found in [12].
We prove that the proposed C-OPT mechanism satisfies
Definition 4.2. The expected surplus of a vendor i when the bid the above properties and hence is optimal.
is b^i ¼ ð^
ci ; q^i Þ is defined as i ð^
ci ; q^i Þ ¼ Ti ð^
ci ; q^i Þ ci Xi ð^
ci ; q^i Þ.
Also, Lemma 4.4. The expected allocation Xi ðci ; qi Þ of the C-OPT
mechanism is nonincreasing in the cost parameter ci and the
i ð^
ci ; q^i Þ ¼ i ð^
ci ; q^i Þ þ ðci c^i ÞXi ð^
ci ; q^i Þ QoS parameter qi .
R c^
In an incentive compatible mechanism, the true surplus i is Proof. The expected allocation Xi ðci ; qi Þ ¼ c i gi ðb^i Þ.
equal to offered surplus. Assume qi is fixed. The expected allocation Xi is 0 for
the losers. Let cia and cib be the quoted cost of the cloud
In simple terms, expected surplus is the difference between vendor ci . Also, we assume i is the winner in both the
what the cloud vendor is willing to accept and what it cases and cia < cib .
actually obtains. Myerson [22] defines a virtual parameter The expected allocation Xi when the cost cia is
for ranking the buyers. This virtual parameter is modified Z c^ia
[12], [19], [60] to capture the correlation between cost and Xi ¼ gi ðc^i ; q^i Þdc
quantity, and is called virtual cost. c ð8Þ
Definition 4.3. The virtual cost is defined as ¼ q^i ðc^ia cÞ:
Similarly, when the cost is cib , the expected allocation is
Fi qcii
Hi ðci ; qi Þ ¼ ci þ : Z c^ib
fi qcii
Xi ¼ gi ðc^i ; q^i Þdc
c ð9Þ
This virtual cost is similar to [12], [19], [60], except that
¼ q^i ðc^ib cÞ:
we consider QoS instead of quantity.
To develop an optimal mechanism, we assume the As is clear from (8) and (9), Xi ðc^ia ; q^i Þ < Xi ðc^ib ; q^i Þ when
following [12]: cia < cib .
Hence, Xi is nonincreasing in cost when QoS is fixed.
. The joint distribution function i ðci ; qi Þ is completely
Similarly, we can prove that Xi is nonincreasing in QoS
defined.
when cost is fixed. u
t
. The virtual cost function Hi is nondecreasing in both
ci and qi .
The expected surplus of the winning vendor is called the
Let ðg; hÞ be the total expected profit of the user. The
information rent of the vendor [61]. Classically, surpluses like
goal ofPan optimal mechanism is to maximize ðg; hÞ ¼
supplier surplus and consumer surplus are examples of
IE½IR ni¼1 hi ðbÞ subject to
information rent.
1. individual rationality. The expected interim surplus Lemma 4.5. The offered surplus i ðc^i ; q^i Þ in C-OPT mechanism
for each cloud vendor is nonnegative, i.e., i ðbi Þ R c
is of the form i ð^
ci ; q^i Þ ¼ i ð
c; q^Þ þ c^i Xi ðy; q^i Þ
0; and
2. Bayesian incentive compatibility. The truth elicitation Proof. The payment function in C-OPT is given by hi ðb^i Þ ¼
R R
should be weakly dominant strategy for all cloud ^ þ c Xi ðy; q^i Þdy, where c Xi ðy; q^i Þdy is the offered
ci gi ðbÞ ci ci
vendors, i.e., surplus to the cloud vendors.
In this case, the information rent of the cloud vendor i
IEbi ½hi ðbi ; bi Þ ci gi ðbi ; bi Þ IEbi ½hi ðb^i ; bi Þ is i ð
c; q^Þ ¼ 0. When c^i ¼ c, then i ¼ 0. Hence, the
ci gi ðb^i ; bi Þ; 8i 2 N; 8bi ; b^i 2 i : information rent paid for the cloud vendor with highest
cost valuation is 0. Hence, the R c offered surplus is in the
By Myerson [22], a mechanism that satisfies the above form of i ð^ ci ; q^i Þ ¼ i ð
c; q^Þ þ c^i Xi ðy; q^i Þ u
t
constraints and maximizes cloud user profit is optimal.
The optimal auction presented in [22] assumes unit The allocation rule is given by
demand of the item and does not take QoS into account. In
^ ¼ 1; if Hi ¼ minðH1 ; H2 ; . . . ; Hn ; Þ
our model, the cloud user has QoS requirement and QoS gi ðbÞ ð10Þ
0; otherwise:
plays an important role in the selection of cloud vendor.
PRASAD AND RAO: A MECHANISM DESIGN APPROACH TO RESOURCE PROCUREMENT IN CLOUD COMPUTING 9
TABLE 4
Procurement Costs in Scenario 1
TABLE 5
Procurement Costs in Scenario 2
REFERENCES
[1] P. Mell and T. Grance, The NIST Definition of Cloud Computing,
NIST Special Publication 800-145, Nat’l Inst. of Standards and
Technology, US Dept. of Commerce, http://csrc.nist.gov/
publications/nistpubs/800-145/SP800-145.pdf, Sept. 2011.
[2] S. Grivas, T.U. Kumar, and H. Wache, “Cloud Broker: Bringing
Intelligence into the Cloud,” Proc. IEEE Third Int’l Conf. Cloud
Computing (CLOUD), pp. 544-545, July 2010.
[3] M.F. Mithani, M. Salsburg, and S. Rao, “A Decision Support
System for Moving Workloads to Public Clouds,” GSTF Int’l
J. Computing, vol. 1, no. 1, pp. 150-157, Aug. 2010,
doi:10.5176_2010-2283_1.1.25.
[4] B. Rochwerger, J. Tordsson, C. Ragusa, D. Breitgand, S. Clayman,
Fig. 5. Cloud broker interactions. A. Epstein, D. Hadas, E. Levy, I. Loy, A. Maraschini, P. Massonet,
H. Muñoz, K. Nagin, G. Toffetti, and M. Villari, “RESERVOIR—-
When One Cloud is Not Enough,” Computer, vol. 44, no. 3, pp. 44-
7 CONCLUSION AND FUTURE WORK 51, Mar. 2011.
Currently, the cloud user pays a fixed price for resources or [5] Y. Yang, Y. Zhou, L. Liang, D. He, and Z. Sun, “A Sevice-Oriented
Broker for Bulk Data Transfer in Cloud Computing,” Proc. Ninth
services. This type of pricing is called fixed pricing. Fixed Int’l Conf. Grid and Cooperative Computing (GCC), pp. 264-269, Nov.
pricing is very popular with telecom providers. On the flip 2010.
side, there is no provision for incentives for users in the fixed [6] B.J. Lheureux and D.C. Plummer, “Cloud Services Brokerages:
The Dawn of the Next Intermediation Age,” Research
strategy. Resource procurement is not only an important Report G00208731, Gartner, http://www.gartner.com/
problem in cloud computing but is also an unexplored area. DisplayDocument?doc_cd=208731, Nov. 2010.
Currently, resource procurement is done manually and [7] F. Ridder and A. Bona, “Four Risky Issues When Contracting for
Cloud Services,” Research Report G00210385, Gartner, http://
there is a pressing need to automate it. bit.ly/S6L4Zx, Feb. 2011.
To automate procurement, we have presented three [8] R. Weiss and A. Mehrotra, “Online Dynamic Pricing: Efficiency,
mechanisms: C-DSIC, C-BIC, and C-OPT. C-DSIC is a low- Equity and the Future of E-Commerce,” Virginia J. Law and
Technology, vol. 6, no. 2, 2001.
bid Vickrey auction. It is allocative efficient and individual [9] M. Bichler, J. Kalagnanam, K. Katircioglu, A.J. King, R.D.
rational but not budget balanced. If the mechanism is not Lawrence, H.S. Lee, G.Y. Lin, and Y. Lu, “Applications of Flexible
budget balanced, then an external agency has to provide Pricing in Business-to-Business Electronic Commerce,” IBM
Systems J., vol. 41, no. 2, pp. 287-302, 2002.
money to perform procurement. [10] Y. Narahari, C. Raju, K. Ravikumar, and S. Shah, “Dynamic
C-BIC is a weaker strategy compared to C-DSIC and it is Pricing Models for Electronic Business,” Sadhana, vol. 30, pp. 231-
Bayesian incentive compatible. In C-BIC, vendorss reveal 256, 2005.
the truth only if other vendors reveal the truth, unlike [11] S. Parsons, J.A. Rodriguez-Aguilar, and M. Klein, “Auctions
and Bidding: A Guide for Computer Scientists,” ACM
C-DISC where vendors reveal the truth irrespective of Computing Surveys, vol. 43, no. 2, article 10, Jan. 2011,
others’ choices. C-BIC achieves budget balance and alloca- doi:10.1145/1883612.1883617.
tive efficiency but not individual rationality. [12] G. Iyengar and A. Kumar, “Optimal Procurement Mechanisms for
Divisible Goods with Capacitated Suppliers,” Rev. Economic
C-OPT achieves both Bayesian incentive compatibility Design, vol. 12, no. 2, pp. 129-154, June 2008.
and individual rationality, which the other two mechan- [13] I. Foster, C. Kesselman, C. Lee, B. Lindell, K. Nahrstedt, and A.
isms cannot achieve. This mechanism is immune to both Roy, “A Distributed Resource Management Architecture that
Supports Advance Reservations and Co-Allocation,” Proc. Int’l
overbidding and underbidding. If a cloud vendor overbids, Workshop Quality of Service, pp. 27-36, 1999.
then the incentive is reduced. If it underbids, then it may [14] H. Casanova and J. Dongarra, “NetSolve: A Network Server for
not be a winner. C-OPT is more general compared to both Solving Computational Science Problems,” The Int’l J. Super-
computer Applications and High Performance Computing, vol. 11,
C-DSIC and C-BIC—even if cloud vendors use different pp. 212-223, 1995.
distributions for cost and QoS, we can safely use C-OPT. [15] S.J. Chapin, D. Katramatos, J.F. Karpovich, and A.S. Grimshaw,
Hence, C-OPT is the preferred mechanism in more cases in “The Legion Resource Management System,” Proc. Job Scheduling
Strategies for Parallel Processing, pp. 162-178, 1999.
the real world.
[16] R. Buyya, D. Abramson, J. Giddy, and H. Stockinger, “Economic
The experiments reveal an interesting pattern. The Models for Resource Management and Scheduling in Grid
resource procurement cost reduces as the number of cloud Computing,” Concurrency and Computation: Practice and Experience,
vendors increase, irrespective of the mechanism implemen- vol. 14, nos. 13-15, pp. 1507-1542, 2002.
[17] M. Mihailescu and Y.M. Teo, “Dynamic Resource Pricing on
ted. The cost in C-BIC reduces more significantly, compared Federated Clouds,” Proc. IEEE/ACM 10th Int’l Conf. Cluster, Cloud
to the other two mechanisms. and Grid Computing (CCGRID ’10), pp. 513-517, 2010.
PRASAD AND RAO: A MECHANISM DESIGN APPROACH TO RESOURCE PROCUREMENT IN CLOUD COMPUTING 13
[18] B. Kalyanasundaram, M. Velauthapillai, and J. Waclawsky, [40] S. Shah, A. Mahmood, and A. Oxley, “Modified Least Cost
“Unlocking the Advantages of Dynamic Service Selection and Method for Grid Resource Allocation,” Proc. Int’l Conf. Cyber-
Pricing,” Theory Computing System, vol. 38, pp. 393-410, July Enabled Distributed Computing and Knowledge Discovery (CyberC),
2005. pp. 218-225, Oct. 2010.
[19] Y. Narahari, D. Garg, R. Narayanam, and H. Prakash, Game [41] F. Li and D. Qi, “Research on Grid Resource Allocation Algorithm
Theoretic Problems in Network Economics and Mechanism Design Based on Fuzzy Clustering,” Proc. Second Int’l Conf. Future
Solutions. Springer, 2009. Generation Comm. and Networking (FGCN ’08), vol. 2, pp. 162-166,
[20] A. Mas-Colell, M.D. Whinston, and J.R. Green, Microeconomic Dec. 2008.
Theory. Oxford Univ. Press, June 1995. [42] W.-Y. Lin, G.-Y. Lin, and H.-Y. Wei, “Dynamic Auction Mechan-
[21] Y. Shoham and K. Leyton-Brown, Multiagent Systems: Algorithmic, ism for Cloud Resource Allocation,” Proc. IEEE/ACM 10th Int’l
Game-Theoretic, and Logical Foundations. Cambridge Univ. Press, Conf. Cluster, Cloud and Grid Computing (CCGRID ’10), pp. 591-592,
Dec. 2008. 2010.
[22] R.B. Myerson, “Optimal Auction Design,” Math. Operations [43] N. Nisan and A. Ronen, “Algorithmic Mechanism Design,” Games
Research, vol. 6, no. 1, pp. 58-73, 1981. and Economic Behavior, vol. 35, nos. 1/2, pp. 166-196, Apr. 2001.
[44] Y.-K. Che, “Design Competition through Multidimensional
[23] R.N. Calheiros, R. Ranjan, A. Beloglazov, C.A.F. De Rose, and R.
Auctions,” RAND J. Economics, vol. 24, no. 4, pp. 668-680, 1993.
Buyya, “CloudSim: A Toolkit for Modeling and Simulation of
[45] F. Branco, “The Design of Multidimensional Auctions,” RAND J.
Cloud Computing Environments and Evaluation of Resource
Economics, vol. 28, no. 1, pp. 63-81, 1997.
Provisioning Algorithms,” Software—Practice and Experience,
[46] M. Bichler and J. Kalagnanam, “Configurable Offers and Winner
vol. 41, no. 1, pp. 23-50, Jan. 2011.
Determination in Multi-Attribute Auctions,” European J. Opera-
[24] G. Belalem, S. Bouamama, and L. Sekhri, “An Effective Economic
tional Research, vol. 160, pp. 380-394, 2005.
Management of Resources in Cloud Computing,” J. Computers,
[47] A. Ronen and A. Saberi, “On the Hardness of Optimal Auctions,”
vol. 6, pp. 404-411, 2011.
Proc. 43rd Symp. Foundations of Computer Science (FOCS ’02),
[25] M. Sharpe, “Lognormal Model for Stock Prices,” http://math. pp. 396-405, 2002.
ucsd.edu/~msharpe/stockgrowth.pdf, 2004. [48] T.S. Chandrashekar, Y. Narahari, C.H. Rosa, D.M. Kulkarni, J.D.
[26] E. Limpert, W.A. Stahl, and M. Abbt, “Log-Normal Distributions Tew, and P. Dayama, “Auction-Based Mechanisms for Electronic
across the Sciences: Keys and Clues,” BioScience, vol. 51, no. 5, Procurement,” IEEE Trans. Automation Science and Eng., vol. 4,
pp. 341-352, May 2001. no. 3, pp. 297-321, July 2007.
[27] A. Gibbard, “Manipulation of Voting Schemes: A General Result,” [49] A. Ronen and D. Lehmann, “Nearly Optimal Multi Attribute
Econometrica, vol. 41, no. 4, pp. 587-601, 1973, doi:10.2307/1914083. Auctions,” Proc. Sixth ACM Conf. Electronic Commerce (EC ’05),
[28] P. Ghosh, N. Roy, S.K. Das, and K. Basu, “A Pricing Strategy for pp. 279-285, 2005.
Job Allocation in Mobile Grids Using a Non-Cooperative [50] M. Wang, S. Liu, S. Wang, and K.K. Lai, “A Weighted Product
Bargaining Theory Framework,” J. Parallel and Distributed Comput- Method for Bidding Strategies in Multi-Attribute Auctions,”
ing, vol. 65, no. 11, pp. 1366-1383, 2005. J. Systems Science and Complexity, vol. 23, pp. 194-208, 2010.
[29] S. Penmatsa and A. Chronopoulos, “Price-Based User-Optimal Job [51] L. Zeng, B. Benatallah, A.H.H. Ngu, M. Dumas, J. Kalagnanam,
Allocation Scheme for Grid Systems,” Proc. Int’l Symp. Parallel and and H. Chang, “QoS-Aware Middleware for Web Services
Distributed Processing, p. 396, Apr. 2006. Composition,” IEEE Trans. Software Eng., vol. 30, no. 5, pp. 311-
[30] X. Xie, J. Huang, H. Jin, S. Wu, M. Koh, J. Song, and S. See, 327, May 2004.
“Pricing Strategies in Grid Market: Simulation and Analysis,” [52] C. Hwang and K. Yoon, Multiple Attribute Decision Making :
Proc. Seventh Int’l Conf. Grid and Cooperative Computing, pp. 532- Methods and Applications. Springer-Verlag, 1981.
538, Oct. 2008. [53] M. Mohabey, Y. Narahari, S. Mallick, P. Suresh, and S.V.
[31] X. Vilajosana, R. Krishnaswamy, and J. Marques, “Design of a Subrahmanya, “A Combinatorial Procurement Auction for QoS-
Configurable Auction Server for Resource Allocation in Grid,” Aware Web Services Composition,” Proc. IEEE Int’l Conf. Auto-
Proc. Int’l Conf. Complex, Intelligent and Software Intensive Systems mation Science and Eng. (CASE ’07), pp. 716-721, 2007.
(CISIS ’09), pp. 396-401, Mar. 2009. [54] T. Saaty, The Analytic Hierarchy Process, Planning, Piority Setting,
[32] X.-R. Cao, H.-X. Shen, R. Milito, and P. Wirth, “Internet Pricing Resource Allocation. McGraw-Hill, 1980.
with a Game Theoretical Approach: Concepts and Examples,” [55] M.C.Y. Tam and V.M.R. Tummala, “An Application of the AHP in
IEEE/ACM Trans. Networking, vol. 10, no. 2, pp. 208-216, Apr. 2002. Vendor Selection of a Telecommunications System,” Omega,
[33] L.J.L. Mingbiao and X. Shengli, “Posted Price Model Based on vol. 29, no. 2, pp. 171-182, 2001.
GRS and Its Optimization Using in Grid Resource Allocation,” [56] R.L. Nydick and R.P. Hill, “Using the Analytic Hierarchy Process
Proc. Int’l Conf. Wireless Comm., Networking and Mobile Computing to Structure the Supplier Selection Procedure,” Int’l J. Purchasing
(WiCom ’07), pp. 3172-3175, Sept. 2007. and Materials Management, vol. 28, no. 2, pp. 31-36, 1992.
[57] M.A. Satterthwaite, “Strategy-Proofness and Arrow’s Conditions:
[34] K. Subramoniam, M. Maheswaran, and M. Toulouse, “Towards a
Existence and Correspondence Theorems for Voting Procedures
Micro-Economic Model for Resource Allocation in Grid Comput-
and Social Welfare Functions,” J. Economic Theory, vol. 10, no. 2,
ing Systems,” Proc. IEEE Canadian Conf. Electrical and Computer
pp. 187-217, Apr. 1975.
Eng. (CCECE ’02), vol. 2, pp. 782-785, 2002.
[58] N. Nisan, T. Roughgarden, E. Tardos, and V.V. Vazirani,
[35] F. Xhafa and J. Kolodziej, “Game-Theoretic, Market and Meta- Algorithmic Game Theory. Cambridge Univ. Press, 2007.
Heuristics Approaches for Modelling Scheduling and Resource [59] C. d’Aspremont and L.-A. Grard-Varet, “Incentives and Incom-
Allocation in Grid Systems,” Proc. Int’l Conf. P2P, Parallel, plete Information,” J. Public Economics, vol. 11, no. 1, pp. 25-45,
Grid, Cloud and Internet Computing (3PGCIC), pp. 235-242, Nov. 1979.
2010. [60] R. Gautam, N. Hemachandra, Y. Narahari, H. Prakash, D.
[36] S. Parsa, A. Shokri, and S. Nourossana, “A Novel Market Based Kulkarni, and J. Tew, “Optimal Auctions for Multi-Unit Procure-
Grid Resource Allocation Algorithm,” Proc. First Int’l Conf. ment with Volume Discount Bids,” Int’l J. Operational Research,
Networked Digital Technologies (NDT ’09), pp. 146-152, July. 2009. vol. 6, no. 1, pp. 70-91, 2009.
[37] L. Ismail, B. Mills, and A. Hennebelle, “A Formal Model of [61] B. Katzman, J. Reif, and J.A. Schwartz, “The Relation between
Dynamic Resource Allocation in Grid Computing Environment,” Variance and Information Rent in Auctions,” Int’l J. Industrial
Proc. Ninth ACIS Int’l Conf. Software Eng., Artificial Intelligence, Organization, vol. 28, no. 2, pp. 127-130, 2010.
Networking, and Parallel/Distributed Computing (SNPD ’08), pp. 685- [62] Amazon Web Services LLC, “Amazon EC2 Pricing,” http://aws.
693, Aug. 2008. amazon.com/ec2/pricing/, Jan. 2011.
[38] W. Shu, “Optimal Resource Allocation on Grid Computing Using
a Quantum Chromosomes Genetic Algorithm,” Proc. Second
Workshop Digital Media and Its Application in Museum and Heritages,
pp. 303-306, Dec. 2007.
[39] Z.-J. Li, X.-D. Liu, X.-D. Duan, and C.-R. Wang, “Optimal Solution
for Grid Resource Allocation Using Particle Swarm Optimiza-
tion,” Proc. Third Int’l Conf. Multimedia and Ubiquitous Eng.
(MUE ’09), pp. 339-346, June. 2009.
14 IEEE TRANSACTIONS ON COMPUTERS, VOL. 63, NO. X, XXXXXXX 2014
Abhinandan S. Prasad received the MTech Shrisha Rao received the MS degree in logic
degree in information technology from IIIT- and computation from Carnegie Mellon Univer-
Bangalore, a graduate school of information sity and the PhD degree in computer science
technology in Bangalore, India. He is currently from the University of Iowa. He is currently an
at Alcatel Lucent India, Bangalore. His re- associate professor at IIIT-Bangalore. His re-
search interests include resource allocation search interests are in distributed computing,
and its application in cloud computing, and specifically algorithms and approaches for con-
computational linguistics applied to Sanskrit. current and distributed systems, and include
He is a member of the IEEE Computer Society solar energy and microgrids, cloud computing,
and the IEEE. energy-aware computing (“green IT”), and de-
mand side resource management. He is a member of the ACM, the
American Mathematical Society, the Computer Society of India, and the
IEEE Computer Society. He is a senior member of the IEEE.