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

This paper develops models for the analysis of a cloud brokering platform under conditions of risk and demand uncertainty, focusing on controlling the risk of not delivering the quality of service required by users. Such risk can occur as a result of inherent limitations of the best‐effort connectivity. We take the approach of modern portfolio theory and show how the trade‐off between risk and profit can be chosen by selecting efficient connectivity portfolios that combine the best‐effort connectivity of different grades with premium‐grade connectivity. We provide theoretical analysis of connectivity portfolio models and related insights delivered by numerical experiments that utilize the measurements of Internet traffic.