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Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach Mathews Z. Nkhoma & Duy P.T. Dang School of Business IT & Logistics

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Cloud computing as an emerging high technology has been recognised by organisations and individuals for a wide range of potential applications. Since the concept’s first appearance in 2007, the authors found a dominant amount of studies in the non-technological domains, including attempts to define and categorise cloud computing and the challenges and issues of the technology’s adoption. Nonetheless, few researches are dedicated to determine the drivers of adopting cloud computing thus the literature is limited on this topic. As more adopters are becoming familiar with the technology and implementing cloud computing in their daily work, understanding of what drives their adoption decision is essential to create opportunities for future cloud technologies to be tailored and aligned with the consumer’s needs thus promoting exploitations of the technology’s promising applications. This research takes a quantitative approach by developing and validating a theory-based conceptual model. Among the theories that are commonly applied in Information Systems research, the authors found Technology-Organisation-Environment framework can encapsulate the adoption’s factors into one big picture. The authors conducted a secondary data analysis on the recent large-scale survey of IBM to investigate the drivers and barriers of cloud computing adoption. Structural Equation Modelling and Partial Least Square statistical methodologies provide rigid scientific procedures to validate the conceptual model. This study contributes a statistically validated conceptual model of the drivers and barriers of cloud computing adoption. In addition, the research provides a comparison between two different discussions (i.e., industry report and academic research) on the same topic and data. The findings benefits are twofold. First, it seeks to clarify the profound knowledge on the factors surrounding cloud adoption to better understanding cloud computing. Second, it also provides directions for future research by suggesting validations on the proposed model while discussing the limitations of analysing commercial survey.

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Page 1: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach

Mathews Z. Nkhoma & Duy P.T. Dang

School of Business IT & Logistics

Page 2: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Cloud computing as an emerging technology• Cloud computing is an emerging technology that has been bringing many

benefits to businesses since 2007 (Aljabre 2012):

– Only requires single-point, centralised installation

Saves IT infrastructure costs through distributive hardware and software

– Supports flexible and dynamic changes Enables rapid business penetration to new markets; suitable for

small and medium-sized businesses

• Applications (Aljabre 2012):

– Fosters distance collaboration (e.g. Google Drive)

– Sharing repository (e.g. Dropbox)

Page 3: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Why did we conduct this research

• In a practical viewpoint, we aim to:

– Support adoption of cloud computing to help foster business efficiency, especially for SMEs with limited resources

– Since cloud computing is relatively new in the market, continuous debates and corrections are necessary to understand better the contributing factors of its adoption

– Make good use of the recent dataset conducted by IBM

• In a theoretical viewpoint, we aim to:

– Apply the Technology-Organisation-Environment framework to explain the phenomenon and contribute a conceptual model

– Evaluate the use of secondary data analysis by using the public dataset from IBM

Page 4: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Research questions

•What are the contributing factors to the

adoption of cloud computing in business?

–What are the drivers?

–What are the barriers?

Page 5: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Research methodology

• Positivism – Quantitative approach

• Explain phenomenon by conducting statistical analysis and applying theory to develop conceptual model

• Statistical techniques:

– Partial Least Square (PLS) (Ringle, C.M., Wende, S. and Will 2005) – secondary data analysis

• Theory:

– Technology-Organisation-Environment (TOE) framework (Tornatzky and Fleischer 1990)

• Dataset:

– IBM Fast Track to The Future: The 2012 IBM Tech Trends Report

– 1200 IT decision-makers from 16 industries in 13 countries

– Insights about adoption of emerging technologies

Page 6: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Proposed hypotheses

Hypothesis

H1. Perceived Benefit (PB) has positive impact on Intention to adopt (ITA) cloud computing.

H2. Perceived Environment Barriers (PEB) has negative impact on Intention to adopt (ITA) cloud computing.

H3. Perceived Technology Barriers (PTB) has negative impact on Intention to adopt (ITA) cloud computing.

H4. Adopter’s style (AS) has negative impact on Intention to adopt (ITA) cloud computing.

H5. Adopter’s style (AS) has positive moderating impact on Perceived Technology Barriers (PTB).

H6. Adopter’s style (AS) has positive moderating impact on Perceived Environment Barriers (PEB).

Page 7: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Analysed model

Page 8: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Research findings

Hypothesis Result

H1. Perceived Benefit (PB) has positive impact on Intention to adopt (ITA) cloud computing.

Not supported

H2. Perceived Environment Barriers (PEB) has negative impact on Intention to adopt (ITA) cloud computing.

Not supported

H3. Perceived Technology Barriers (PTB) has negative impact on Intention to adopt (ITA) cloud computing.

Not supported

H4. Adopter’s style (AS) has negative impact on Intention to adopt (ITA) cloud computing.

Supported

H5. Adopter’s style (AS) has positive moderating impact on Perceived Technology Barriers (PTB).

Not supported

H6. Adopter’s style (AS) has positive moderating impact on Perceived Environment Barriers (PEB).

Not supported

Page 9: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Discussion & Limitation

Commercial report’s findings Statistical results

Information security is a major challenge to cloud computing adoption

PTB1 (InfoSec) has high loading despite its low statistical significance

Market adaptability is a major driver of adoption of cloud computing

Also has high loading but low statistical significance

Adoption of cloud computing depends on Adopter’s Style

Consistent result supported with statistical significance

The theory and results from data analysis slightly confirmed the report’s findings

the secondary dataset was our greatest challenge in this research

Page 10: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Recommendations & Conclusion

• We have evaluated the contributing factors of cloud computing adoption and the use of secondary commercial dataset

• We have proposed the TOE framework-based conceptual model to explain the phenomenon

• Future researches are strongly encouraged to develop instruments to capture data precisely and re-evaluate our conceptual model

Page 11: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

Q & A

–Dr. Mathews Z. Nkhoma

[email protected]

–Mr. Duy P.T. Dang

[email protected]

Page 12: Nkhoma and Dang (2013), "Contributing Factors of Cloud Computing Adoption: a Technology-Organisation-Environment Framework Approach"

References

• Aljabre, A. (2012), “Cloud Computing for Increased Business Value,” International Journal of Business and Social Science, Vol. 3 No. 1, pp. 234–239.

• IBM Center for Applied Insights. (2012), Fast track to the future: The 2012 IBM Tech Trends Report. Retrieved from https://www.ibm.com/developerworks/mydeveloperworks/blogs/techtrends/?lang=en

• Ringle, C.M., Wende, S. and Will, S. (2005), “SmartPLS 2.0 (M3) Beta,” Hamburg, Germany. http://www.smartpls.de.

• Tornatzky, L.G. and Fleischer, M. (1990), The Processing of Technological Innovation, Lexington, MA, Lexington Books.