Do strategy, processes, personnel and technology affect firm’s propensity to adopt cloud computing? An empirical investigation

Previous empirical research on cloud computing (CC) adoption factors has examined the effects of only a small number of firm’s characteristics on CC adoption. The purpose of this paper is to investigate empirically the effects of a wide set of firm’s characteristics, which concern four important aspects of it, its strategy, processes, personnel and technology, on the propensity to adopt CC.

Having as theoretical background the technology, organization and environment (TOE) theory of technological innovation adoption, in combination with Scott-Morton’s framework on firm’s main elements, ten research hypotheses have been developed based on previous CC and management literature. They were tested using data collected through the e-Business W@tch Survey of the European Commission from 676 European firms from three traditional manufacturing sectors.

The results reveal three characteristics of a firm that affect positively its propensity to adopt CC for all firm sizes: the adoption of ICT investment reduction strategy, the adoption of product/service innovation strategy and the sophistication of firm’s administration support ICT infrastructure. Furthermore, they reveal four additional characteristics of a firm that affect positively the propensity for CC adoption only in the small firms: the adoption of process innovation strategy, the employment of ICT personnel, as well as the sophistication of firm’s production support and e-sales ICT infrastructures.

First, this study provides a theoretical foundation for the elaboration of the organizational perspective of the TOE theory of technological innovation adoption, which opens a new stream of CC adoption factors research, investigating the effects of a wide range of firm’s characteristics on CC adoption. Second, based on the above foundation, this study enriches substantially the empirical literature on CC adoption factors. The main limitation of this study is that it has been based on data from only three European manufacturing sectors.

The findings provide new interesting insights concerning specific firm’s characteristics and therefore internal conditions that increase its propensity for CC adoption, and reveal specific kinds of strategy and ICT infrastructures for which CC is more appropriate and beneficial.

The authors have developed a theoretical foundation for extending our knowledge concerning the characteristics and internal conditions of firms that favor/promote the adoption of CC, which supports and enables the substantial extension of the existing knowledge base on CC adoption factors. Based on this theoretical foundation, the authors have formulated and tested ten research hypotheses concerning effects of firm’s strategic directions, processes, ICT infrastructures and ICT personnel, which have not been investigated previously, on CC adoption propensity.