Total Cost of Service Life The Need for Decision Support in Selecting, Comparing, and Orchestrating Services Martin Matzner, Oliver Müller

1. Total Cost of Service Life
The Need for Decision Support in Selecting,
Comparing, and Orchestrating Services
IESS 1.0, Geneva, 2009-02-18
Martin Matzner, Oliver Müller

2. Motivation
Services (conventional services and web services) are
discovered and evaluated by descriptions of their
properties
Categories of properties: functional and non-functional
Amongst non-functional properties: “price“ for service
consumption
Research question:
“How to evaluate the price of a service ?“
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3. Status-quo
Pricing lists and
simple calculators
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4. Complexity of the property “price“
Evaluating a specific service (1)
Comparing several services to each other (2)
Evaluating and comparing orchestrations comprising
several services (3)
Huge variety of pricing models and conditions
Existence of derivative payments (e.g. opportunity and
capital costs) that are implied by the decision for or
against a service
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5. Pricing models
Flat-Pricing (cf. Internet or mobile phone flat rates)
Per-packet Pricing (cf. sending short messages)
Parametric Pricing (cf. a translation service that charges
depending on the number of words)
Resource-based Pricing (cf. mobile data transfer)
Lump-sum Pricing
Commission/Brokerage
Hybrid Pricing Models (cf. monthly short message
packages)
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6. Framework of decision problems
based on Alexander‘s (1970) design principles
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7. Informing Kernel from Investment Theory
Payments (instead of costs)
Consider derivative monetary consequences
capital lockup
interests (based on the opportunity rate of interest of the internal
funds and the outside capital rate of interests)
tax payments
Entire life-cycle of usage
Conventional approaches (e.g. “Gartner-TCO“) are
insufficient
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8. VoFi-based TCO calculation
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9. Ongoing: Application in service marketplaces
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10. Contact
Martin Matzner
(martin.matzner@ercis.uni-muenster.de)
Oliver Müller
(Oliver.mueller@ercis.uni-muenster.de)
Leonardo-Campus 3
48149 Münster
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