Analysis of Economics of Computer Backup Service

Marshall FREIMER  Ushio SUMITA  Hsing K. CHENG  

IEICE TRANSACTIONS on Communications   Vol.E75-B   No.5   pp.385-400
Publication Date: 1992/05/25
Online ISSN: 
Print ISSN: 0916-8516
Type of Manuscript: PAPER
Category: Switching and Communication Processing
computer backup service,  dynamic probabilistic modelling,  economic analysis,  hot site computer,  numerical algorithm,  optimization,  

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An organization may suffer large losses if its computer service is interrupted. For protection, it can purchase computer backup service from the outside market which temporarily provides service replacement from a central facility. A dynamic probabilistic model is developed which describes such a computer backup service system. The parties involved have conflicting motivations. The supplier is interested in optimizing his expected profits subject to a given set of parameters while the subscriber will evaluate the service contract to his own best interest. This paper analyzes how the economic interests of the supplier and subscribers interact based on a dynamic reliability analysis of their respective computer systems. Assuming all physical parameters fixed, the supplier's optimal value in terms of economic parameters is determined. An algorithmic procedure is developed for computing such values. Some numerical examples are presented in order to gain insights into the system.