A SLA Framework for QoS Provisioning and Dynamic Capacity Allocation

Any QoS scheme must be designed from the perspective of pricing policies and service level agreements (SLAs). Although there has been enormous amount of research in designing mechanisms for delivering QoS, its applications has been limited due to the missing link between QoS, SLA and pricing. Therefore the pricing policies in practice are very simplistic (fixed price per unit capacity with fixed capacity allocation or pricing based on peak or 95-percentile load etc.). The corresponding SLAs also provide very limited QoS options. This leads to provisioning based on peak load, under-utilization of resources and high costs. In this paper we present a SLA based framework for QoS provisioning and dynamic capacity allocation. The proposed SLA allows users to buy a long term capacity at a pre-specified price. However, the user may dynamically change the capacity allocation based on the instantaneous demand. We propose a three tier pricing model with penalties (TTPP) SLA that gives incentives to the users to relinquish unused capacities and acquire more capacity as needed. This work may be viewed as a pragmatic first step towards a more dynamic pricing scenario. We solve the admission control problem arising in this scheme using the concept of trunk reservation. We also show how the SLA can be used in virtual leased-line service for VPNs, and web hosting service by application service providers (ASPs). Using web traces we demonstrate the proposed SLA can lead to more efficient usage of network capacity by a factor of 1.5 to 2. We show how this translates to payoffs to the user and the service provider.