QoS Based Pricing for Web Services
Web Services technologies have over a period of time replaced expensive EDI links and have come to stay as the backbone for collaboration between various enterprises. While currently majority of Web Services are available free, over a period of time increased business dependencies of customers on Web Services are resulting in demands for better Quality of Service. Investments in newer technologies to improve Quality of Service results in increasing Cost of Service, which needs to be offset by revenues. While service providers seek predictability in revenues, customers and users of the Web Services seek flexibility in pricing by not being charged for services not used and service features that are not provided. QoS thus becomes a key determinant of pricing in Web Services. This paper attempts to define a framework for pricing Web Services based on the QoS features provided, the underlying Cost of Service and the level of predictability of revenues that accrue to the service provider based on the transaction volumes of various services. The proposed framework suggests a Subscription-based Pricing for Commoditized Web Services, Transaction-based Pricing for Channelized Web Services and Risk-Based Pricing for Customized Web Services.
KeywordsService Provider Price Model Base Price Application Service Provider Customer Firm
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