Factors Affecting the Adoption of Cloud Computing

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Jul 15, 2010 - Cloud computing enables companies to buy their technological need what if it is ... Keywords: cloud computing, characteristics, adoption.
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Factors Affecting the Adoption of Cloud Computing Ezgi Arı, Department of Management Information Systems, Bogazici University, Istanbul, Turkey, [email protected] Sona Mardikyan, Department of Management Information Systems, Bogazici University, Istanbul, Turkey, [email protected]

Abstract Cloud computing is a new and upcoming technology. It is also a new business model for companies. Cloud computing enables companies to buy their technological need what if it is needed and they only pay for the amount that they used. There are many factors that affect the adoption of cloud computing. This study examines previous studies related to cloud computing adoption and presents a new model and new factors according to both literature and interviews with cloud computing experts and cloud service providers. Study model also includes potential relationships between these factors. Keywords: cloud computing, characteristics, adoption

Introduction The Development of Web 2.0 leaded to a change in World Wide Web and enabled many users to share information and this development also increased the importance of collaboration among enterprises (Tapscott and Williams, 2008). These new technology trends and business models also lead to emergence of cloud computing addition to easy construction and operation of datacenters (Armbrust et al., 2009). Additions to these technology trends, cluster and grid computing and virtualization also have an effect on the emergence of cloud computing (Butrico et al, 2008). It is obvious that cloud computing is a new trend in organizations. Globalization also leads competition among companies so accessing data from anywhere and anytime increases the importance of cloud computing. According to National Institute of Standards and Technology: “cloud computing is a model for enabling convenient, on demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction” (Chang et al., 2010). In other words, cloud computing is a model for enabling convenient, on demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction (Chang et al., 2010). Both large organizations and small and medium enterprises use cloud computing and additionally, individuals has been already using cloud computing services through many web sites such as Facebook since 2006, YouTube since 2005, Gmail since 2006 and many users have been using Hotmail since 1996 (Mahmood, 2011). Cloud computing is also a new business model in Turkey, so many companies prefer to adopt cloud computing due to various advantages. In this study, factors having an effect on the adoption of cloud computing are determined according to both literature and reviews of cloud computing experts and cloud service providers. In this regard, this project contributes to literature and additionally, provides organizations with important factors in order to adopt cloud computing as in their information strategic planning.

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Characteristics of Cloud Computing Cloud computing has various characteristics. Users’ need can change dynamically and cloud computing enables users to consume computing resources such as software and storage when they are required and users only buy according to their needs and they are charged by the amount that they used and this is on demand service characteristics of cloud computing (Chang et al., 2010; Mahmood, 2011; Chen et al., 2010; Carroll et al., 2011). The second characteristics of cloud computing is broad access network. Computing resources reside over the network and these computing resources can be used with different platforms such as laptops, mobile phones, PDAs and personal computers at users’ site (Chang et al., 2010; Carroll et al., 2011). Cloud computing enables cloud users to use cloud services anywhere and anytime through these devices (Chen et al., 2010). This characteristic of cloud computing relies on virtualization. Cloud computing also enables organizations to store their servers, other hardware and equipments virtually instead of physically (Ross, 2010). Cost is also one of the most important characteristics of cloud computing. Cost consists of purchasing cost and long term usage costs. Purchasing cost of cloud computing is very inexpensive compared to traditional computer technologies (Armbrust et al., 2009). Consumers have benefit of low cost advantage of cloud computing because buying services over cloud computing is particularly inexpensive (Chen et al., 2010). In addition, companies can save in energy, space and staff by preferring cloud computing technologies. In other words, in the long run organizations save in costs (Ross, 2010). The responsibility to update applications and software belongs to cloud service provider and it decreases software upgrade costs of an organization (Prince, 2011). Moreover, they save in maintenance costs by reducing the number of both actual hardware and maintenance staff (Prince, 2011). In this manner, maintenance is very easier because in an organization, because updates and other maintenance processes are held in the cloud rather than on each user’s computers (Prince, 2011). Security is another issue related to cloud computing. Security is evaluated a cloud computing risk by organizations (Carroll et al., 2011). Customers or cloud users must be sure that their organizational data is more secure in a cloud (Chen and Yang, 2011). Besides, cloud computing has a rapid elasticity, reliable infrastructure, user friendly and integration of cloud services are not easy for organizations. Cloud computing enables that computing resources can be immediately supplied (Mahmood, 2011). Cloud computing also has a reliable infrastructure meaning serving with minimal downtime and giving rapid response to consumers’ requirements (Chen et al., 2010). According to Chang et al. (2010) integration of cloud services with existing legacy systems are hard. When consumers buy cloud computing services, they buy applications designed as user friendly (Mahmood, 2011). Finally, companies need cloud computing. Ross (2010) says that companies need cloud computing due to changing technological improvements and to satisfy their technological needs. In addition, competitive pressure and trading partner pressure are other factors that increase the need for cloud computing (Chen et al., 2011).

Adoption of Cloud Computing The background of adoption of cloud computing Cloud computing is an upcoming technology and a new research area in the literature, so academic research is very limited in this field. Ross (2010) analyzes factors influencing the adoption of cloud computing by decision making managers. In this study, it is stated that organizations want to maximize their resources and also minimize their costs and so cloud computing is a new approach serving companies needs. Perceived cost effectiveness, need and reliability and security factors are taken in order to predict cloud computing adoption by technology acceptance model (Ross, 2010).

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Chen et al. (2011) study understanding the determinants of cloud computing adoption. Technology, organization, environment (TOE) framework is used and eight factors are considered to predict cloud computing adoption: relative advantage, complexity, compatibility, top management support, firm size, technology readiness, competitive pressure and trading partner pressure (Chen et al. 2011). Behrend et al. (2011) study cloud computing adoption and usage in community colleges.

Factors in the Study The main goal of the study is to explain and evaluate the factors having an effect on the adoption of cloud computing and to predict causal relationships between these factors. Security, reliability, cost, virtualization, need, on demand service, maintenance, integration and user friendliness are adapted from literature and they are explained in “Characteristics of cloud computing” part. Addition to literature reviews; interviews are arranged with companies giving cloud computing services. Contacts are made with General Manager of PayDeg and Country Representative of Turkey at Roll out Cloud Program and Anadolu Bilişim Hizmetleri and Konsalt Bilgi Teknolojileri. According to interviews, legislation and regulations, supplier availability, performance, customization and managerial support are added into the model and explained below. Legislation and regulations is critical issue in cloud computing. Legal factors are included in the theoretical model to predict whether there are enough legal protections to solve conflicts between cloud users and cloud providers when a problem such as a disaster or a hack occurs. Second issue is supplier availability and it includes two aspects. One of the aspects is that there must be enough suppliers to purchase cloud services when organizations need anytime and second aspect is that there must enough suppliers to give after sale support. Interviews show that cloud computing technology increases companies’ performances especially users’ performances due to various benefits with regard to traditional computing technologies. Cloud services can be customized according to organizational needs and changes can be added for users to use cloud services easily. Management support is also an important determinant through adoption process.

Relationships between Determinants The model of this study also predicts relationships between some of these factors mentioned above. According to interviews four relationships are established. There is a relationship between security and performance. In order to make cloud infrastructures more secure, each added protections may have a negative effect on performance. Second relationship is between legal issues and security. There should be enough legal protection for safety of organizational data. Security has an effect on cost. If a company prefers using private cloud, it is more secure than using public cloud. Because private cloud costs much than public cloud, there may be a relationship between security and cost. Another relationship considered in the model is between customization and user friendliness. More customization makes cloud services more complex and decreases user friendliness. Additionally, reliability has a relationship with security, because software malware and bugs can affect cloud reliability negatively (Ross, 2010). Maintenance, virtualization and on demand service have effects on cost. Due to on demand service feature of cloud computing, organizations pay only for the amount what they use rather than paying for all amount and it decreases cost (Carroll et al., 2010). In addition, companies buy virtual infrastructures and so they buy less actual hardware and do not need pay for power, cooling and floor space (Carroll et al., 2010). Organizations can save in maintenance staff and maintenance cost because maintenance responsibility belongs to cloud service provider (Ross, 2010).

The proposed model of the study is given in Figure 1.

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Fig 1. Theoretical Framework of Study

Conclusion In this study, factors having any effects on cloud computing adoption are not only determined according to literature but also taking considerations of cloud computing experts and service providers. There are 14 factors in the model and it also takes into consideration the relationships between these factors. In other words, cloud computing adoption and the effects of other determinants on each other are both represented. In this regard, this model adds a new vision into the literature. In the future studies, first data will be collected through a questionnaire. Then structural equation modeling methodology will be applied to estimate causal relations of these factors.

References Armbrust, M., Fox, A., Griffith, R., Joseph, A. D., Katz, R. H., Konwiski, A., et al. (2009). Above the Clouds: A Berkeley View of Cloud Computing. Berkeley: Electrical Engineering and Computer Sciences University of California at Berkeley, Technical Report No. UCB/EECS-2009-28. Behrend, Tara S, Wiebe, Eric N., London, Jeniffer E. And Johson, Emily C. (2011) ‘Cloud computing adoption and usage in community colleges’, Behaviour & Information Technology, 30:2, 231-240, First published on 15 July 2010 (iFirst). Butrico, M., Da Silva, D., & Yousseff, L. (2008). Toward a Unified Ontology of Cloud Computing, Grid Computing Environments Workshop, 2008. GCE '08, DOI: 10.1109/GCE.2008.4738443, (pp. 1-10). Austin: IEEE. Carroll, M., van der Merwe, A., & Kotze, P. (2011). Secure Cloud Computing: Benefits, Risks and

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Controls, Information Security South Africa (ISSA), DOI: 10.1109/ISSA.2011.6027519, (pp. 1-9). Pretoria: IEEE. Chang, E., Dillon, T., & Wu, C. (2010). Cloud Computing: Issues and Challenges, Advanced Information Networking and Applications (AINA), 2010 24th IEEE International Conference, DOI: 10.1109/AINA.2010.187, (pp. 27-33). Pert, WA: IEEE. Chen, Y., Low, C &Wu, M. (2011). Understanding the determinants of cloud computing adoption, Industrial Management & Data Systems, Vol. 111 (7), pp. 1006-1023. Chen, X., Huo, X., Zhang, S., & Zhang, S. (2010). Cloud Computing Researh and Development Trend, Future Networks, 2010. ICFN '10. Second International Conference, DOI: 10.1109/ICFN.2010.58 (pp. 93-97). Chen, Z and Yang, J (2010). Cloud computing Research and Security Issues, Computational Intelligence and Software Engineering (CiSE), 2010 International Conference, DOI: 10.1109/CISE.2010.5677076 ,(pp.1-3). Mahmood, Z. (2011). Cloud Computing: Characteristics and Deployment Approaches. Computer and Information Technology (CIT), 2011 IEEE 11th International Conference, DOI: 10.1109/CIT.2011.75, (pp. 121-126). Prince, J. D. (2011). Introduction to Cloud Computing. Journal of Electronic Resources in Medical Libraries , 449-458. Ross, V. W. (2010). Factors Influencing The Adoption Of Cloud Computing By Decision Making Managers. Doctoral Dissertation, Capella University. . Tapscott, D. and Williams, A. D. (2008). Wikinomics: How Mass Collaboration Changes Everything, Portfolio, Penguin Group, New York.