Rising trends in the number of customers turning to the cloud for their computing needs has made effective resource allocation imperative for cloud service providers. In order to maximize profits and reduce waste, providers have started to explore the role of oversubscribing cloud resources. However, the benefits of oversubscription in the cloud are not without inherent risks. This work attempts to unveil the different incentives, risks, and techniques behind oversubscription in a cloud

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... ucture. The discrete event simulator CloudSim is used to compare the generated revenue and performance of oversubscribed and non-oversubscribed datacenters. The idea of multi-class service levels used in other overbooked industries is implemented in simulations modeling a priority class of VMs that pay a higher price for better performance. Three simulations are implemented. The first two compare the results of different VM allocation policies without VM migration. The third implements VM migration in an oversubscribed, power-aware datacenter. Results show that oversubscription using multi-class service levels has the potential to increase datacenter revenue, but the benefit comes with the risk of degraded QoS, especially for non-priority customers.