Truthful Mechanisms for Resource Allocation and Pricing in Clouds

A major challenging problem for cloud providers is designing efficient mechanisms for Virtual Machine (VM) provisioning and allocation. Such mechanisms enable the cloud providers to effectively utilize their available resources and obtain higher profits. Recently, cloud providers have introduced auction-based models for VM provisioning and allocation which allow users to submit bids for their requested VMs. We formulate the dynamic VM provisioning and allocation problem for the auction-based model as an integer program considering multiple types of resources. We then design truthful greedy and optimal mechanisms for the problem such that the cloud provider provisions VMs based on the requests of the winning users and determines their payments. We show that the proposed mechanisms are truthful, that is, the users do not have incentives to manipulate the system by lying about their requested bundles of VM instances and their valuations. We perform extensive experiments using real workload traces in order to investigate the performance of the proposed mechanisms. Our proposed mechanisms achieve promising results in terms of revenue for the cloud provider.