Abstract: Cloud services are access services for virtual computing resources, of which the two important factors affecting pricing decision are customer value differences and resource capacity constraints. Aiming at the two common pricing methods of fixed price and usage-based pricing in the cloud service market, the general assumptions are proposed and a nonlinear pricing model aiming at maximizing the profit of monopolist is constructed. The model is solved and the implication of the model is revealed. Numerical examples are illustrated to compare the two pricing methods from the aspects of market coverage, shadow price of computing resources, monopolist's profit and customer surplus. The main findings include four aspects. First, monopolist's profit, customers' surplus and computing resources demand are affected by customer type distribution. Efforts should be made to grasp customer type distribution information. Second, usage-based pricing should be used when computing resources are sufficient. Third, market coverage is related to the customer type distribution and the available computing resources, and the market coverage is larger when pricing by usage. Last, increasing the computing resources is conducive to improving social welfare. Theoretical and methodological support are provided for cloud service providers' pricing decisions.

Key words: cloud computing, monopoly market, price discrimination, fixed price, pricing by usage