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Article

Cloud Services and Pricing Strategies for Sustainable Business Models: Analytical and Numerical Approaches

Department of Business Administration, Seoul National University of Science and Technology, 232 Gongreung-Ro, Nowon-Gu, Seoul 01811, Korea
Sustainability 2020, 12(1), 49; https://doi.org/10.3390/su12010049
Received: 9 November 2019 / Accepted: 30 November 2019 / Published: 19 December 2019
(This article belongs to the Special Issue Sustainable Business Models and Common Goods)
Previous studies have introduced different potential pricing strategies for cloud services. However, not much research has been done comparing subscription pricing and pay-per-use pricing, which are commonly used pricing schemes. Also, there are very few studies which analyze a two-part tariff pricing scheme for cloud services, even though this option may increasingly attract service providers as the cloud market becomes more competitive and the profit margin grows narrower. Previous research has focused on firms’ profitability rather than social welfare due to the limitations of free services. This study uses theoretical and numerical analysis to compare the social welfare and profitability of three pricing schemes commonly used by firms: subscription pricing, pay-per-use pricing, and two-part tariff pricing. It shows that the pay-per-use pricing is the best solution from the perspective of social welfare, which contrasts with the conclusion of a previous study stating that social welfare is maximized under a two-part tariff. This paper also shows that the two-part tariff is the most profitable pricing scheme for firms. View Full-Text
Keywords: sustainable business model; cloud computing; service models; two-part tariff pricing; subscription pricing; pay-per-use pricing sustainable business model; cloud computing; service models; two-part tariff pricing; subscription pricing; pay-per-use pricing
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MDPI and ACS Style

Chun, S.-H. Cloud Services and Pricing Strategies for Sustainable Business Models: Analytical and Numerical Approaches. Sustainability 2020, 12, 49. https://doi.org/10.3390/su12010049

AMA Style

Chun S-H. Cloud Services and Pricing Strategies for Sustainable Business Models: Analytical and Numerical Approaches. Sustainability. 2020; 12(1):49. https://doi.org/10.3390/su12010049

Chicago/Turabian Style

Chun, Se-Hak. 2020. "Cloud Services and Pricing Strategies for Sustainable Business Models: Analytical and Numerical Approaches" Sustainability 12, no. 1: 49. https://doi.org/10.3390/su12010049

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