Optimal Response to Burstable Billing under Demand Uncertainty

Abstract: Burstable billing is widely adopted in practice, e.g., by colocation data center providers, to charge for their users, e.g., data centers, for data transferring. However, there is still a lack of research on what the best way is for a user to manage its workload in response to burstable billing. To overcome this shortcoming, we propose a novel method to optimally respond to burstable billing under demand uncertainty. First, we develop a tractable mathematical expression to calculate the 95th percentile usage of a user, who is charged by provider via burstable billing for bandwidth usage. This model is then used to formulate a new bandwidth allocation problem to maximize the user's surplus, i.e., its net utility minus cost. Additionally, we examine different non-convex solution methods for the formulated stochastic optimization problem. We also extend our design to the case where a user can receive service from multiple providers, who all employ burstable billing. Using real-world workload traces, we show that our proposed method can reduce user's bandwidth cost by 26% and increase its total surplus by 23%, compared to the current practice of allocating bandwidth on-demand.