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Proposing a Value-based Pricing Model in IaaS based on the Market Segmentation Theory

Hakimi Asiabar, Mohammad | 2021

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  1. Type of Document: M.Sc. Thesis
  2. Language: Farsi
  3. Document No: 54281 (01)
  4. University: Sharif University of Technology
  5. Department: Industrial Engineering
  6. Advisor(s): Houshmnad, Mahmoud
  7. Abstract:
  8. Cloud infrastructure pricing framework is one of the challenges for many cloud economists and researchers, albeit its proper definition is one of the main requirements for business triumph. Efforts to focus on this issue have been extensively focused on a uniform market. Moreover, the models are mainly based on the cost factor and resources of cloud infrastructure, aiming to maximize revenue and profit margins for cloud service providers. Models that also consider the demand side and define criteria regarding the customer needs, preferences, and experiences are called value-based models, which provide a great competitive advantage for the providers aside from its higher profit margin and value co-creation concept. Hence, we have adopted this approach to develop our pricing model.On the other hand, the concept of market segmentation helps us to target market segments that are profitable and in line with the organization's strategies. The purpose of the cloud market segmentation is to collect different consumption patterns of cloud environment customers based on their different workload characteristics so that the cloud service provider can offer one or more appropriate pricing strategies to serve its target customers in the way of bypassing the constraints such as the budget to reach maximum profits and market share.In this study, according to market segmentation criteria, we first divide the cloud infrastructure into 6 segments based on the characteristics of the case study data set. Then, by defining the utility function for each of these segments, the preferences of the business cloud customer with different workload characteristics have been quantified.Next, concerning pricing strategies, a general framework for cloud pricing based on customers' business values (external rationality) and cloud infrastructure and resources (internal rationality) is presented. Finally, using meta-heuristic searching algorithms, the optimal price point is determined to complete this framework
  9. Keywords:
  10. Cloud Computing ; Utility Function ; Optimization Algorithms ; Infrastructure as a Service ; Cloud Market Segmentation ; Value-Based Pricing Model

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