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Abstract.Value-based software engineering (VBSE) is an emerging stream of research that addresses the value considerations of software and extends the traditional scope of software engineering from technical issues to businessrelevant decision problems. While the concept of value in VBSE relies on the well-established economic value concept, the exact definition for this key concept within VBSE domain is still not well defined or agreed upon. We argue the discourse on value can significantly benefit from drawing from research in management, particularly software business. In this paper, we present three aspects of software: as a technology, as a design, and as an artifact. Furthermore, we divide the value concept into three components that are relevant for software product development companies and their customers: intrinsic value, externalities and option value. Finally, we propose a value decomposition matrix based on technology views and value components.

Cloud computing providers offer two different pricing schemes when renting virtual machines: reserved instances and ondemand instances. On-demand instances are paid only when utilized and they are useful to satisfy a fluctuating demand. Conversely, reserved instances are paid for a certain time period and are independent of usage. Since reserved instances require more commitment from users, they are cheaper than on-demand instances. However, in order to be cost-effective compared to on-demand instances, they have to be extensively utilized. This work focuses on finding the optimal combination of on-demand and reserved instances, such that the demand is satisfied and the costs minimized. To achieve this goal, this study introduces a stochastic model of the resources, based on Inventory Theory. The idea is to formulate the optimization problem as an inventory-keeping problem and then derive the optimal strategy. The paper evaluates the proposed model using data from an industry case, comparing the performance with a brute-force approach. The conducted experiments show that the Inventory Theory model provides accurate results and potentially allows prior research on Inventory Theory to be applied to optimal cloud provisioning.

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