Model for Incentivizing Cloud Service Federation

Conference paper
Part of the Lecture Notes in Computer Science book series (LNCS, volume 10537)


In cloud computing, big service providers rule the market due to the economies of scale. Cloud federation presents a possible solution, allowing small cloud providers to increase their competitiveness by making strategic alliances with one another and, thus, forming a network with shared resources. Previous research suggests several different factors that may incentivize the participation of selfish cloud providers, such as cost disparity, existence of big competitors, and revenue sharing mechanisms. It is also assumed that individual cloud providers aim to maximize their profits and will choose to make alliances as long as there is a benefit in doing so. For deciding on whether to federate, cloud providers take into consideration whether the federation will yield them an increase in profits. Our study models with a repeated game the interactions between selfish heterogeneous agents that aim to maximize individual profits. Each agent starts off as an individual and is allowed to change its strategy and federate with other providers, in order to improve its own performance. By looking at the speed of establishing collaborations and the overall profit of all individuals, we can determine which specific incentives encourage the creation of cloud federations. The results of this study suggest that the factors considered can incentivize the formation of federations. Yet, it also affects the number and size of the resulting federations.


Cloud federation Federation formation Revenue sharing Business incentive SMEs Repeated game Strategic alliance 



This research was conducted within the project BASMATI (Cloud Brokerage Across Borders for Mobile Users and Applications), which has received funding from the ICT R&D program of the Korean MSIP/IITP (R0115-16-0001) and from the European Union’s Horizon 2020 research and innovation programme under grant agreement no. 723131.


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Copyright information

© Springer International Publishing AG 2017

Authors and Affiliations

  1. 1.Technology Management, Economics, and Policy Program, Department of Industrial Engineering, College of EngineeringSeoul National UniversitySeoulSouth Korea

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