The Economics of Cloud Computing: A Review

Cloud computing has the potential to bring significant advantages to organisations, in terms of cost savings, efficiency boosts, user-friendliness, better security, and accelerated innovation. The shift to cloud computing has the potential to revolutionise the way organisations perform their daily processes, hence the economics of cloud computing. Such technology will allow businesses computing power and storage from service providers, and to pay on demand, with a profound impact on the cost structure of all the industries, turning some of the fixed costs in marginal costs of production. Such a change will have a substantial impact on the incentives to create new business, and through this, it has the potential to impact investments and macroeconomic growth, job creation in all industries and job reallocation in the ICT sector, and public finance accounts, through the direct impact on the public sector spending and the indirect one on the tax revenues. This work focuses on comparing many pricing models techniques employed and proposed. We also highlight the pros and cons of each. The comparison is based on many aspects such as fairness, pricing approach, and utilisation period. Such an approach provides a solid ground for designing better models in the future. Our study found that most approaches are theoretical and not implemented in the real market, although their simulation results are very promising. Moreover, most of these approaches are biased toward the service provider.