  Cloud computing allow the users to efficiently and dynamically provision
computing resource to meet their IT needs. Cloud Provider offers two
subscription plan to the customer namely reservation and on-demand. The
reservation plan is typically cheaper than on-demand plan. If the actual
computing demand is known in advance reserving the resource would be
straightforward. The challenge is how to make properly resource provisioning
and how the customers efficiently purchase the provisioning options under
reservation and on-demand. To address this issue, two-phase algorithm are
proposed to minimize service provision cost in both reservation and on-demand
plan. To reserve the correct and optimal amount of resources during
reservation, proposed a mathematical formulae in the first phase. To predict
resource demand, use kalman filter in the second phase. The evaluation result
shows that the two-phase algorithm can significantly reduce the provision cost
and the prediction is of reasonable accuracy.
