An overview of cloud computing adoption across ...

2015 Proceedings of the Information Systems Education Conference v32 Orlando, Florida USA ____________________________________________________________________________________________

An overview of cloud computing adoption across industries in a developing country Prince Kwame Senyo University of Ghana Business School [email protected]

Erasmus Addae South Texas College [email protected]

Ibrahim Osman Adam University of Development Studies Ghana [email protected]

Abstract: The purpose of the study is to investigate the nature of cloud computing adoption across different industries of Ghanaian organizations with the view of providing adoption trends and patterns for policy direction, practice and future research. A quantitative research approach consisting a survey of 305 Ghanaian organizations was adopted. The findings indicated the following. Firstly, the level of cloud computing adoption is low in Ghana. Secondly, information technology services, financial institutions, educational and telecommunication firms are the front runners in cloud computing adoption in Ghana. Thirdly, Ghanaian organizations tend to adopt software-as-a-service (SaaS) type of cloud service than infrastructure-as-a-service (IaaS) and platform-as-a-service (PaaS). Also, Ghanaian organizations tend to adopt private cloud deployment than hybrid, public and community. Lastly, cloud computing adoption is largely dominated by medium sized organizations. This study makes the following contribution to research and practice. First, it provides insight into cloud computing adoption trends and patterns across different industries in Ghana which arguable was non-existent. Second, this study has laid the foundation and provided direction for future research on cloud computing in Sub-Saharan Africa. Finally, this study contributes to practice by pointing out potential investment sectors for cloud computing business. It is therefore envisaged that these constructive and valuable findings contribute to the development of the cloud industry in Ghana as it is in its infancy.

Keywords: Cloud computing, Nature, Adoption, Overview, Ghana, Developing country service rather than the usual notion of 1. INTRODUCTION being a product. Cloud computing has been adopted in private, public, and non-profit Cloud computing has been described as the sectors in both industrialized and new development in the information developing countries but the developed technology arena (Armbrust, 2010).With economies are far ahead of the developing this advancement comes a huge potential in terms of adoption and use . In spite of which businesses and governments in the the multitudinous benefits associated with developed world are already utilizing to the cloud technology, its potential is yet to improve service delivery and performance be realized in the developing countries. in various facets of government and Extant research into cloud computing, business. Cloud computing basically entails especially in the context of Africa is still the provision of information technology as a limited as compared to other jurisdictions.

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Again, most intellectual investigations carried out on cloud computing have focused on developed economies (Alshamaila, Papagiannidis, & Li, 2013; Carcary, Doherty, & Conway, 2013; Sultan, 2014). Regardless of low empirical studies and full exploitation of cloud computing in developing countries, some valuable contributions have been made in respect to the cloud research discourse in the developing context (Dahiru, Bass, & Allison, 2014; Kshetri, 2010; Le Roux & Evans, 2011; Makena, 2013). However, arguably the nature of cloud computing adoption remains unclear in developing countries. In Ghana, for instance, the nature of cloud computing adoption is still unclear, whereas in the developed economies, the types of cloud services available, the type of cloud deployment, industry and firms adopting and using the technology has been established. This position has led to a research gap as asserted by Heeks (2002) and Avgerou (2000) cited in Effah (2014) that, direct transfer of experiences in ICT use in developed countries cannot be transferred to the developing countries dues to contextual differences. To this end, this paper presents preliminary insights into the adoption of cloud computing in the Ghanaian context. The paper is set out as follows: we start out by examining trends in cloud computing research. We then delineate to review literature pertaining to cloud computing then, the methodology adopted for the study, presentation and discussion of findings, conclusions, limitations of the study, and future research directions. 2. LITERATURE REVIEW

Information technologies have long been regarded as a product, but this notion seems to dwindle as many IT providers are striving to provide the best of services at reduced cost to customers. Cloud computing seems to provide the answer to an era where information technologies are

cloud computing has been in the information technology industry for a while just that it was not commercialized. The genesis of cloud computing is found in other technologies such as the grid, parallel and distributed systems, virtualization, multi-core chips, Internet technologies such as web services, service-oriented architectures and web 2.0, systems management like autonomic computing, and data center automation(Buyya, Yeo, Venugopal, Broberg, & Brandic, 2009). There is still not a standard definition of what cloud computing entails, as both academics and industry players are making significant strives to bring to bear a standard definition of the technology (Ahmad, 2013).

2.1 Cloud Service Models and Deployments Cloud services are offered through four deployments models, namely; private, public, community, and hybrid. Private cloud is the deployment where the cloud infrastructure is managed solely for (Keung & Kwok, 2012). It is an internal utilization of cloud technologies which is either maintained inhouse or have restricted access to only users in the organisation (Yang & Tate, 2012). Under the Public cloud, the infrastructure is made available to the general public be it an organization or individual. It is usually owned by cloud service providers selling the cloud services. It is hosted, operated, and managed by a third-party vendor from one or more data centers (Marston, Li, Bandyopadhyay, Zhang, & Ghalsasi, 2011). Some popular public cloud services are Amazon EC2 (Elastic Cloud), S3 (Simple Storage Service), Google AppEngine and SalesForce.com. Community Cloud is the type of cloud infrastructure which is communal and is used by several organizations. The different organisations usually have the same security needs and compliance requirements as well as a similar vision It may be managed by the



organizations or a third party and may exist on premise or off premise (Marinos & Briscoe, 2009). On the other hand, a hybrid cloud is made up of two or more clouds (private, community, or public). The individual components of the hybrid cloud are unique entities, even after being combined into the hybrid cloud, however, they are still bound together by some standardized technology that ensures data and application portability (Jula, Sundararajan, & Othman, 2014). In hybrid clouds, cost savings and elasticity of the public cloud are combined and this enables an on-demand acquisition and release of resources based on temporary needs. This is done without having to acquire additional IT infrastructure (Ahmad, 2013). Operating in a single cloud may not prove beneficial for some companies. This is because a single cloud may not be able to offer them the benefits they expect from the cloud infrastructure. There are three cloud service delivery models to end-users. These are Infrastructure-as-a-Service (IaaS), Platform-as-a-Service (PaaS), and Software-as-a-Service (SaaS) (Mell & Grance, 2011). Apart from these main service delivery models a number of variations are currently found in the literature. These include concepts such as Security-as-a-Service (SecaaS), Data as a service (Daas), Communication-as-aService (CaaS), Business Process-as-aService (BPaaS), IT-as-a-Service (ITaaS) and so on. The coinage of everything as a service or X as a service (Xaas) as Schaffer (2009) puts it, has therefore come to stay. However, it is worth noting that all these are offshoots from the three main service delivery models. For clarity, the three main service delivery models are discussed in details. Software-as-a-Service (SaaS) provides a solution that utilizes servers, bandwidth, and software. This is offered and managed by the cloud service provider. With SaaS, an organization only looks for a provider that has the solution it needs and

this solution must have already been tailored to its employees needs but the caveat is that the provider will ensure the service is always available (Siamak, 2010). The responsibility is on the vendor to make the applications needed by an organisation available to its customers through the internet. SaaS is a popular delivery model of cloud computing and has been adopted by big companies like IBM and Salesforce in their businesses. This dominance has resulted in other sub-models adopting it and they include Security-as-a-Service (SecaaS) and Communication-as-a-Service (CaaS) (Heinle & Strebel, 2010; Mujinga, 2012). According to Cheng-Chung Chu et al. (2012) a Platform-as-a-Service (PaaS) consists of a hardware configuration, an operating system, a software framework or some other common component which together provides the basis for some applications or services to be run. A PaaS offers a hosted environment which is purely a web-based application-development platforms that enables the development of programs online (Buyya, Vecchiola, & Selvi, 2013). PaaS is built on top of Infrastructure-as-a-Service (IaaS) (Zhang, Zhang, Chen, & Huo, 2010) and provides the operating systems and services over the internet, eliminating the need to download or installs applications on enduser computer. Given this web-based development platform, it means that PaaS is open to developers who can use it to develop applications that can run on it (Giessmann, 2013). Infrastructure-as-aService (IaaS) delivers the hardware components consisting of the server, storage and network infrastructure as well as associated software as a service through the internet. Whilst users of the infrastructure do not have to buy the infrastructure it allows for them to provision the resources on demand. IaaS provides the whole infrastructure stack that supplies the computer infrastructure such as servers, memory, CPUs, disk space, and network connectivity and enables technologies (Heinle & Strebel, 2010).



2.2 Industry With a population of 25 million, Ghana is the second largest economy in West Africa, the fastest growing region in Africa between 2013 and 2014, (AfDB, 2014). According to the International Telecommunications Union (ITU, 2013), Internet penetration in the West African nations stood at 3,568,757 users, representing 14 percent of the population in 2012 a significant growth in Internet use.

The Internet as a requirement for cloud computing advancement puts Ghana in a pole position for adoption, use and nation development through the cloud technology. The cloud computing industry is in its infancy in Ghana and the awareness and adoption of cloud computing is still at a low stage. The industry arguably has not established itself as others such as banking, telecommunication, media, and education. Again the industry does not have a unified front, however, some organizations are pioneering the cloud computing technology in Ghana. As there is no clear direction from a unified body as to how the industry should operate. Organizations are currently introducing cloud computing through the framework of existing laws such as Electronic Transaction Act of 2008 ACT 772 and Governmental agencies such as Ministry of Communication, National Information Technology Agency (NITA), and National Communications Authority (NCA). It is important to establish that, the National Information Technology Agency (NITA), and other private firms like MTN, IBM, RackAfrica, and GhanaDotCom are pioneering the realization of cloud computing in the Ghanaian industry (IBMGhana, 2013; MTN, 2013; NITA, 2013). 3. RESEARCH METHODOLOGY

The data collection process for the study went through three distinctive steps,

namely: survey instrument design, selecting the appropriate sampling frame and conducting surveys with selected organizations from the sampling frame. Data for the study was collected through questionnaires. The sampling technique adopted for the study was a stratified random sampling since, it allows a balanced sample of the population to be selected from subpopulation which then represent maximum representation of the entire population (Hair, 2010; Saunders, 2009). This method helps to reduce bias in the sample selected from the population and also helps to estimate the sampling error (Fisher, 2010). The stratified techniques entails two stages first, the population is divided into subpopulations (strata) based on one or many stratification variables. In the second stage, the participants are selected from each strata by a simple random sampling. Organizations operating in the greater Accra of Ghana were the target population for the study thus, some organization were selected to represent the subpopulation. The subpopulation were, Ghanaian and foreign owned businesses operating in Accra. Hence, a participant must belong to the strata to be selected. The list of companies in the Ghana Club 100, firms registered on the Ghana stock exchange, and multinational companies operating in Ghana were consulted for targeted individual organizations. Participants were then selected from the strata through a simple random method so that each participant has an equal chance of being selected (Creswell & Clark, 2010). The research questionnaires were distributed among the participants of the strata. An electronic version of the questionnaire was also developed to enable the researcher elicit responses from participants who opted for it because, the electronic version was faster as compared to the hardcopy versions. The data collection was carried out from January to March 2014. Some respondents failed to return printed questionnaires while others also failed to respond to electronic versions



as well. A total of 305 responses was received constituted by 283 printed copies and 22 electronic copies respectively, representing 87.7 % of the targeted sample. 4. FINDINGS

The analysis presents the general cloud computing adoption settings among Ghanaian organizations such as industry type, duration of operation, type of cloud services adopted, duration of adoption and the type of cloud deployment adopted by adopters.

Table I shows the distribution of organizations based on the industry in which they operate. The IT Services sector recorded the highest percentage of participants with a percentage of (13.4%) followed by Educational with a percentage of (11.8%) and Financial & Banking Services with a percentage of (10.8%). The rest is the Government Sector (9.5%), Media & Communication (9.4%), Electricity, Water Supply, Oil & Gas (7.2%), Travel/Leisure & Hospitality (6.9%), Construction (6.2%), Real Estate (5.6%), Manufacturing (5.2%), Health Care (4.3%), Telecommunication (3.6), Mining & Quarrying (3.3%) and Others industries (3.0%). The coverage of industries in this study shows that, the data was a representative sample of the population Table I: Industry Distribution of Participants

Percent ages 6.2

Construction

Frequency 19

Real Estate

17

5.6

10

3.3

36

11.8

Health Care

13

IT Services

41

Electricity, Water Supply, Oil & Gas Education

22

Mining & Quarrying

4.3

13.4 7.2

Table I: Industry Distribution of Participants Telecommunication

Financial Services / Banking Manufacturing

Frequency 11

Percent ages 3.6

16

5.2

29

9.5

9

3.0

33

Travel / Leisure / Hospitality Government Sector

21

Media & Communication Others

6.9

28

Total

10.8

9.2

305

100

In relation to years of establishment, organizations established for more than ten (10) years were more than those established between six (6) to ten (10) years, three (3) to five (5) years and one (1) to two (2) years. Organizations established for more than 10 years had 46.2 % out of the total sample while organizations established between 3 - 5 years secured 36.7%. Organizations established between 6 10 years recorded 9.5% whiles those established between 1-2 years recorded 7.5%. Table II shows the distribution and representation of the organizations and their years of existence. Table II: Years of establishment 1 - 2 Years

Frequency 23

6 - 10 Years

29

9.5

305

100.0

3 - 5 Years

More Than 10 Years Total

112

141

Percentage 7.5

36.7

46.2

Organizations with employees between the ranges of 11 500 was the category with the highest number of participants (56.4%), followed by organizations with more than 500 employees (25.6%) and 1 10 employees (18.0%). This clearly shows



that the sample was dominated by medium sized organizations since, organization with workforce size of about 500 are classified as that.

Table III: Employee size 1 - 10 Employees 11 - 500 Employees 500+ Employees Total

Frequency 55

Percentage 18.0

78

25.6

172

305

56.4

100.0

Table VI shows the distribution of cloud computing adopters, non-adopters, and potential adopters and also the years of implementation. 113 respondents representing (37%) asserted that they have adopted cloud computing while 153 respondents representing (50.2%) said they have not adopted cloud computing. However, 39 respondents representing (12.8%) said they were thinking about adopting cloud computing. In relation to years of implementation, 30.2% of respondents said they have adopted cloud computing for a period less than two years and 6.8% of respondents adopted for the period of five years or more. Table IV Cloud Computing Adoption Status Yes No

Thinking about it Total

Frequency 113

Percentage 37.0

153

50.2

305

100.0

39

12.8

Years of implementing cloud computing None Less than Two (2) Years

Frequency 192 92

Percentage 63.0 30.2

Five (5) years or more Total

21

6.8

305

100.0

Table VII shows the level of awareness about computing among the organizations in Ghana. 19% of respondents recorded Low awareness level of cloud whiles 37.7% recorded Medium level of awareness. Not surprising, 30.8% of respondents indicated they have high awareness of cloud computing and 12.5% of respondents who purported not to have any idea about cloud computing was also not surprising. These percentages, however, corroborated the number of adopters, non-adopters and potential adopters as per the data collected. Table V: Awareness of cloud computing Low

Frequency 58

Percentage 19.0

High

94

30.8

305

100.0

Medium None

Total

115 38

37.7

12.5

113 respondents representing (37%) of the sample size agreed to have adopted cloud computing however, a further analysis pointed out that (24.9%) of the adopters adopted, Software-as-a-Services (SaaS) type of cloud services while (12.1%) of the adopters adopted Infrastructure-as-aService (IaaS) type of cloud services. In relation to cloud deployment models, (31.1%) of the adopters adopted Private cloud while (5.9) of the adopters adopted Hybrid cloud deployment. Table VI Type of cloud services adopted SaaS

Frequency 76

None

192

IaaS

Total

Percentage 24.9

37

12.1

305

100.0

63.0



Type of cloud deployment adopted Frequency Percentage Private 95 31.1 cloud Hybrid cloud 18 5.9 None

Total

192

305

63.0

100.0

5. DISCUSSION

The nature of technology adoption has been studied by some extant researchers such as Harrison, Mykytyn Jr, and Riemenschneider (1997), Bajwa and Lewis (2003) and constructive pointers have been identified in these studies. For instance, Bajwa and Lewis (2003) analyzed the nature of information technology (IT) adoption in the United States by size and various technologies. Also, Zhu, Kraemer, and Xu (2003) investigated the nature of emerging electronic business adoption among European organization through size, industry, country and technology. It was evident from these studies that firm size, industry and technology are useful in determining adoption nature of a technology. Hence, this study also adapted this approach to reveal the nature of cloud computing adoption from the Ghanaian context. Table VII Industry and cloud Adoption Status A NA PA Totals Construction 1 0 18 19 Health Care 4 4 5 13 Real Estate 4 1 12 17 Education 12 3 21 36 Mining & 4 2 4 10 Quarrying Electricity, Water 1 12 9 22 Supply, Oil & Gas IT Services 34 2 5 41 Telecommunicati 11 0 0 11 on

Table VII Industry and cloud Adoption Status A NA PA Totals Financial 24 2 7 33 Services / Banking Manufacturing 9 3 4 16 Travel / Leisure / 1 2 18 21 Hospitality Government 0 1 28 29 Sector Media 8 3 17 28 Others 0 4 5 9 Total 11 39 153 305 3 Notes: -Square=185.1, df =26, P=0.000, Cramer's V = 0.552 A=Adopters NA=Non-Adopters PA=Potential Adopters The cross-tabbing of industry by cloud adoption status revealed the following findings. IT Services sector scored the highest frequency of 34 followed by Financial & Banking sector with a frequency of 24. Other significant adopters were from Educational Sector (12), Telecommunication (11), Media (8) and Manufacturing (9). The adoption among the rest of the industries are Construction (1), Electricity Water & Gas (1), Travel & Hospitality (1), Health (4) and Government Sector (0). The p-value indicates that the test is significant therefore, the decision to adopt cloud computing or not is influenced by the type of industry which an organization belongs. Hence, organizations in the IT Services, Financial & Banking, Education, and Telecommunication sectors tend to spearhead the adoption of cloud computing in Ghana. Finding 1: IT Services, Financial, Educational and Telecommunication sectors tend to spearhead cloud computing adoption in Ghana.

An analysis of the types of cloud service adopted by Ghanaian organizations pointed out that, Software-as-a-Service (SaaS) was



the most adopted services, followed by Infrastructure-as-a-Services (IaaS). The platform-as-a-Service type of cloud computing was not adopted by any organization from the participants. A further analysis of the type of cloud service adopted against industry indicated that, there is a significance difference among the industry and the type of cloud service adopted since, the front runners in cloud adoption seems to adopt SaaS than IaaS. Table VIII Industry and Type of cloud Service Adopted SaaS IaaS None Totals Construction 1 0 18 19 Health Care 4 0 9 13 Real Estate 3 1 13 17 Education 8 4 24 36 Mining & Quarrying 3 1 6 10 Electricity, Water 1 0 21 22 Supply, Oil & Gas IT Services 19 15 7 41 Telecommunication 4 7 0 11 Financial Services / 18 6 9 33 Banking Manufacturing 9 0 7 16 Travel / Leisure / 1 0 20 21 Hospitality Government Sector 0 0 29 29 Media 5 3 20 28 Others 0 0 9 9 Total 76 37 191 305 Notes: -Square=155.33, df =26, P=0.000, Cramer's V =0.505=0.552 Finding 2: Ghanaian organizations tend to adopt Software-as-a-Service (SaaS) type of cloud Service than Infrastructure-as-a-Service and Platform-as-a-Service.

As earlier asserted, the nature of a technology can be determined by the size of the organization. The size of the organization was measured in relation to the number of employees. Organizations with employee size of 11 500 recorded the highest rate (75) of cloud adoption while those with more than 500 and those with 1 10 employees had 20 and 18

respondents respectively. The trend analysed from this finding points to the fact that, middle size organization tends to adopt cloud computing than those with small employees and very large organizations. A further analysis indicated that, there is a statistical difference between the sizes of adopters. Table IX Size and cloud Adoption Status A NA PA Totals 1 - 10 18 37 0 55 Employees 11 - 500 75 59 38 172 Employees 500+ 20 57 1 78 Employees Totals 11 15 39 305 3 3 Notes: -Square =51.77, df =4, P= 0.0001, Cramer's V = 0.2913 A=Adopters NA=Non-Adopters PA=Potential Adopters Finding 3: Medium size Ghanaian organizations tend to adopt cloud computing than small and larger organizations. 6. CONCLUSION

The discussion of the findings from the analysis in relation to the nature of cloud computing adoption indicates that the level of cloud computing adoption is still low, IT Services, Financial, Educational and Telecommunication sectors are the front runners in cloud computing adoption in Ghana. Also, Ghanaian organizations tend to adopt Software-as-a-Service (SaaS) type of cloud Service than Infrastructure-as-aService and Platform-as-a-Service. Furthermore, Ghanaian organizations tend to adopt Private cloud deployment than Hybrid, Public and Community and largely dominated by medium size Ghanaian organizations.



The study has made significant contributions to research, practice and policy. In regards to research, this study contributes to the body of knowledge on cloud computing by providing insights into the nature of cloud computing from an African perspective. This is an important contribution given the existence of cultural differences and societal idiosyncrasies existing in different countries. The study also bridges the ostensible literature gap between the developed and developing countries. The study contributed to practice by drawing attention of organizations to current adoption trends in the infants cloud computing industry. Thus, organizations venturing into cloud computing adoption have a fundamental understanding of the nature, a knowledge arguably not available previously to Ghanaian organizations. In regards to policy, it is noted that creating a favorable information technology and communication environment will positively influence the adoption of cloud computing. The enabling environment in the form of legislation, ICT infrastructure and policy will propagate the cloud computing agenda thereby stimulating economic growth and development.

Some limitations have been identified in this study therefore, future research directions have been suggested. First, the study focused on organizations within the jurisdiction of the capital city Accra hence, did not cover firms in other parts of Ghana. Thus, future studies should cover other areas of the country to provide a holistic understanding of cloud adoption. Second, the result of the quantitative study might not be applicable in qualitative studies, therefore, future studies should consider using a qualitative approach to lend more generalization to the findings. 7. REFERENCES

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