CLOUD COMPUTING, INFORMATION FLOWS, AND MARKETS Subir K. Chakrabarti Department of Economics IUPUI Rajeev R. Raje Department of Computer and Information Science IUPUI

Network Support for Cloud  Commerce via Cloud Computing  Allows greater flexibility  Allows Guaranteed and Continuous Access  Alters the Information flow in the Network  May lead to “Overall Efficiency Gains”  Analysis – Compare the net surplus and gains from trade generated in a Network with Cloud Computing vs. in a Network without Cloud Computing

Factors in the Network Analysis  Without Cloud  Upfront Setup Costs  Excess costs of maintenance of existing capacity. E.g. capacity has to be maintained even when not in use  Under utilization of Resources Resources devoted for computing may not be used to its fullest extent  With Cloud  More efficient Usage of Resources  Multi-tasking over the Same Resources  Greater Information Flow

Economies of Scales in Cloud Computing  Lower per Unit Cost  This is the result of the large scale of Cloud Computing.  Different Models of Service Delivery  E.g., Direct User Consumption – Netflix  May Lower Entry Barriers, increase Competition, and Social Welfare  The ease of renting state of the art computing capacity will lower entry barriers-could lead to lower prices and higher output.

QoS Issues in Cloud Computing  Many quality of service (QoS) issues are critical for Cloud-based Systems  E.g., Guarantees  Privacy and Security are Two QoS Parameters that present Many Challenges in Cloud-based Scenarios

Questions to be Investigated  Is Welfare and Total Trade Greater Under Cloud Computing when Compared with the Non-Cloud Scenario?  Does Cloud Computing Lower Entry Barriers?  Does Cloud Computing Increase Competition and Efficiency?

Questions to be Investigated  What are the Trade-offs for an Organization with respect to QoS Parameters such as Security and Privacy?  To What Extent should Organizations Invest in Providing QoS Guarantees?  What Role will QoS Play in Selection of an Appropriate Cloud-hosted Service from Many Available Choices?

Possible Approaches and Challenges  Game of Attrition Between the Cloud Service Providers, Adversaries and Users.  How to Formalize such a Game?  Is there an Equilibrium in this Game?  Empirical Experimentation  Simulation?  Actual Hosting of Services and Validation?