Research On The Mixed Pricing Strategy Of Cloud Service For The Perspective Driven By Supply And Demand

As a major technological breakthrough in the past decade,cloud(computing)service has been boomingly adopted among the industries.On the one hand,unicorn companies(commonly known as "3A")specializing in providing cloud services such as Amazon Web Services,Microsoft Azure and Ali Aliyun appear on the domestic and foreign markets;on the other hand,traditional software companies such as IBM,Oracle,Kingdee and others have already made its traditional business change to cloud services provider.However,under the boom of the commercialization of cloud services,there are also a series of hidden crises.For example,Nirvanix which was the world's leading cloud storage service provider unexpectedly announced that it would stop service in 2013.Nirvanix's collapse was rooted in the company's long-term reliance on venture capital,which did not result in a good profit model and finally led to a broken funding chain.The reason of the collapse is Nirvanix's lost in the disorderly price war,failed to explore a suitable charging model based on product and user characteristics.Therefore,in the increasingly competitive cloud service market,how to formulate a reasonable price strategy according to local conditions is of far-reaching significance to the survival and development of cloud service enterprises.For the most critical issue of the cloud computing commercialization--pricing,there is still lack of systematic and profound discussion in the academic world.Based on the traditional "subscription pricing" and "pay-per-use pricing",this paper considered two important factors of the user heterogeneity and the firm's pricing costs to construct a mixed pricing model for the first time.The model analysis found that:(1)During the early development of the market(while the user fitness of groups towards cloud services is very low),cloud service enterprises should generally use the "subscription pricing" and combine with low-price strategy to cultivate user habits;As the market matures(while the user fitness increases and transaction cost reduces),"pay-per-use pricing" should be introduced,thus to offer the mixed pricing model.(2)In the mixed pricing mechanism,if the user fitness rises(or transaction cost declines),users tend to choose "subscription pricing" rather than "pay-per-use pricing",then cloud services enterprises will get more profits.(3)Changes in the user fitness and transaction cost will accordingly affect the provider's profits,consumer surplus and social welfare,but the impact of the two parameters are not the same.This paper provides theoretical guidance for cloud service providers to make proper price strategies in business practice.