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An Agency Perspective to Cloud Computing

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Economics of Grids, Clouds, Systems, and Services (GECON 2014)

Part of the book series: Lecture Notes in Computer Science ((LNCCN,volume 8914))

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Abstract

The field of cloud computing is strongly affected by conflicts of interest between providers and users of resources. A comprehensive and integrative model for representing and analyzing these conflicts on a theoretically well-founded basis is, however, still lacking. Therefore, this paper establishes such a model based on economic agency theory. Employing two realistic example scenarios, we identify representative challenges faced by cloud users and generalize them as typical problems present in agency relations. Based on this conception, we correlate existing practices and strategies from cloud computing with corresponding abstract instruments from agency theory. Finally, we identify approaches that are – even if suggested by economic theory – not practically employed in the cloud domain and discuss the potential to utilize them in future technical and non-technical developments.

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Notes

  1. 1.

    For an overview of agency theory also discussing its different understandings and lines of research, see also [5].

  2. 2.

    In fact, the actual legal regulations are far more sophisticated. For instance, the transfer of personal data beyond the EU can be allowed if the destination country is explicitly recognized as providing an “adequate level of protection” or in case the transfer is covered by instruments like the “safe harbor agreement” or the so-called “standard contractual clauses”. This would, however, under certain circumstances (like, e.g., under German legislation) invalidate the legal construct of “processing on behalf of the controller” and thus result in further complications. Without going more into detail and for the sake of clarity, we therefore assume – like it is usually done in practice – a strict “EU-internal” requirement.

  3. 3.

    Like, e.g., CloudHarmony – https://www.cloudharmony.com/.

  4. 4.

    High-volume contracts concluded by government agencies or large, multinational corporations might be the exception here.

  5. 5.

    In order to actually provide this functionality, it is a necessary (but not sufficient) condition that receiving the certificate is more expensive for less capable providers than for strong ones. This can, however, be assumed for typical certification schemes.

  6. 6.

    Like, e.g., the Apache toolkits jclouds (https://jclouds.apache.org/) and libcloud (https://libcloud.apache.org/).

  7. 7.

    The same arguments do, of course, also apply to initiatives for cloud-related standardization which are basically also aimed at reducing the hold-up risk by establishing provider substitutability.

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Acknowledgements

The research presented in this paper has been partially funded by the European Commission in the context of the Research Framework Program Seven (FP7) project SECCRIT (Grant Agreement No. 312758, https://seccrit.eu).

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Authors and Affiliations

  1. Center for Applied Legal Studies, Karlsruhe Institute of Technology, 76131, Karlsruhe, Germany

    Frank Pallas

  2. FZI Forschungszentrum Informatik, 10117, Berlin, Germany

    Frank Pallas

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  1. Frank Pallas
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Correspondence to Frank Pallas .

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Editors and Affiliations

  1. Technology, Economics, and Policy Program, College of Engineering, Seoul National University, Gwanak-Gu, Seoul, Korea, Republic of (South Korea)

    Jörn Altmann

  2. Department of Mathematics and Computer Science, University of Antwerp, Antwerp, Belgium

    Kurt Vanmechelen

  3. School of Computer Science, Cardiff University, Cardiff, United Kingdom

    Omer F. Rana

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Pallas, F. (2014). An Agency Perspective to Cloud Computing. In: Altmann, J., Vanmechelen, K., Rana, O. (eds) Economics of Grids, Clouds, Systems, and Services. GECON 2014. Lecture Notes in Computer Science(), vol 8914. Springer, Cham. https://doi.org/10.1007/978-3-319-14609-6_3

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  • DOI: https://doi.org/10.1007/978-3-319-14609-6_3

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