Abstract: Cloud computing promises on-demand provisioning of resource to applications and services. In cloud computing, a provider leases its computing resources in the form of virtual machines to users, and a price is charged for the period they are used. Static pricing is the dominant pricing strategy in today’s market but dynamic pricing helps to improve the revenue. The main challenge is to design an optimal dynamic pricing policy, to maximize the long-term revenue. Here adaptive increment approach will be used for revenue maximization problem with dynamic pricing as well as dynamic provisioning. The aim is to understand from a Cloud Computing company’s perspective, how decisions about the pricing and the optimal allocation of the given resources for the various Cloud Services can be supported.

Keywords: Dynamic resource Provisioning, Dynamic Pricing, Adaptive Incremental Approach, Spot Markets.