Abstract—Cloud computing is an IT paradigm that has progressed successfully in some organizations and enterprises across the world. Cloud users can leverage on the facilities available on the cloud to develop and deploy applications. Cloud providers also have software that can be utilized for routine services by users already deployed on the cloud. The services provided by the cloud are scalable and available at a cost. On the other hand, most organizations have continued to utilize on–premise infrastructure which some consider cheaper than migrating to the cloud. Migration to the cloud is believed to reduce or even eliminate the capital and operational expenses of an enterprise. This paper examines present trends in the area of cloud economics and provides a guide for future research. The study was executed by means of review of some literature available on cloud economics. In the present work, the objective is to answer the following question: what is the current trend and development in cloud economics? The finding is that a balance of the supply and demand side of economies of scale is critical to cloud economics. Different pricing methods being adopted by CSPs is appropriate for the user in terms of choice. Index Terms— Cloud Computing, Economics, Cost I. INTRODUCTION LOUD computing is a model for enabling universal, on-demand and convenient network access to a shared pool of configurable computing resources (e.g., networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction” [1]. Vaquero [2] defines cloud computing as a large pool of easily usable and accessible virtualized resources such as hardware, platforms and services. These resources can be dynamically configured to a variable load scale, allowing for an optimum resource utilization. This pool of resources is usually exploited by a pay–per–use model, in which guarantees are offered by the infrastructure provider using service level agreements. Cloud computing provides elastic and scalable services exploiting on-premise infrastructure or Manuscript received December 08, 2017; revised January 22, 2018. This work was supported in part by the Covenant University through the Centre for Research, Innovation and Discovery (CUCRID). I. Odun-Ayo is with the Department of Computer and Information Sciences, Covenant University, Ota, Nigeria. (+2348028829456; isaac.odun-ayo@covenantuniversity.edu.ng) T. Oladimeji is with the Department of Computer and Information Sciences, Covenant University, Ota, Nigeria. tolulope.oladimeji@covenantuniversity.edu.ng) B. Odede is with the Department of Computer and Information Sciences, Covenant University, Ota, Nigeria (blessingodede@gmail.com). off–premise facility from cloud service providers (CSP). Cloud utilizes the core concept of virtualization and operates using multi–tenancy. The services are provided remotely using a web browser or over the Internet. Cloud computing makes it possible for large enterprises to migrate some functions to the cloud, while small scale businesses can utilize the cloud without bothering about initial hardware and software cost. Cloud computing is a new evolution of IT services delivery from a remote location, either over the Internet or intranet involving multi-tenant environment enabled by virtualization. Cloud computing has three primary types of service, Software–as-a-Service (SaaS), Platform-as-a-Service (PaaS) Infrastructure-as-a-Service (IaaS). In SaaS, the CSP provides an application over the Internet that is accessible to multiple users utilizing the application simultaneously. Users do not have to worry about installation cost and licensing fees. In PaaS, the CSP provides a platform to enable users develop and deploy an application. The user does not have control over the underlying infrastructure, but has control over the application and the hosting environment [2]. In IaaS, the CSP provides infrastructure for storage, computing and network. The core concept utilized is virtualization. The user has no control over the hardware, but controls the operating systems, storage and the deployed application at a cost. IaaS and PaaS consumers are mostly enterprises, using the cloud to outsource their IT functions [2]. SaaS consumers are individuals moving their email, social networking and backup, word processing to the cloud [2]. That is migrating data, compute, content and entertainment needs to the cloud. There are four cloud deployment models. Private, public, community and hybrid clouds. A private cloud is utilized by an organization using in–house infrastructure. It can be managed on-premise or off–premise. A public cloud provides infrastructure and services to the public. The infrastructure is owned by the organization and services provided at a cost. A community cloud is owned by several organizations with shared common interest. The infrastructure may be managed by the organizations or a third party. Hybrid cloud is a combination of two or more cloud types bound together by technology that enables data and application portability [2]. As in the past and recent times, a lot of investment has been going into the cloud, both on the consumer and provider’s side. According to Margaret Reuse in TechTarget, cloud economics is a branch of knowledge concerned with principle, cost and benefits of cloud computing. Although the cloud can facilitate resource Cloud Computing Economics: Issues and Developments Isaac Odun-Ayo, Member, IAENG, Tolulope Oladimeji, and Blessing Odede “C Proceedings of the International MultiConference of Engineers and Computer Scientists 2018 Vol I IMECS 2018, March 14-16, 2018, Hong Kong ISBN: 978-988-14047-8-7 ISSN: 2078-0958 (Print); ISSN: 2078-0966 (Online) IMECS 2018