Isyourheadinthecloudswhenusingthecloud?

CloudStorage
ADescriptiveResearchintoConsumerPreferences

C.Grin(370532),A.L.Mudd(368908),M.Hakhof(368844)
Team

Introduction

Cloud storage allows an individual or a corporation to upload files to computer

storage devices outside of their network. These files arebackedupautomaticallyandcan
be accessed and shared anywhere where there is an internet connectionandadeviceable
to read the data (Maynard, 2013). The technology has altered the way that data, from
vacation photos to confidential personal details to this very project, are stored and
accessed. The responsibility for the files is passed to the provider of the storage, saving
timeandefforttotheuser.
Most individuals today use some form of cloud computing in their personal and
professional lives, but many do not fully understand the technology or sometimes even
realize they areusingitthiscouldbeidealforthecompaniesprovidingthecloud storage.
As Ethan Oberman,CEOofcloud computingcompanySpiderOaksaid,thegoalhasless
to do with having consumers understand theyre using cloud than having themrecognize
the brand for its services (Stone, 2013). Cloud storage used by individuals has become
increasingly affordable (Yahoo offers a Tetrabyte of storage for free through its Flickr
service), making it a true commodity. Companies count on individuals spreading their
brand name throughout their networks in order to lead to closing large (more lucrative)
deals at thecorporatelevel(Stone,2013)(Jackson,2013).Consumersseemtocontinueto
update, upgrade, and subscribe to cloud services despite the recent hacks of iCloud,
Snapchat, and Dropbox and the price increases by Apple in the fall of 2014 (Kazz,
2014).The problem that arises is that consumers appear to clearly lack awareness
regardingtheiruseandpurchaseofcloudstorage.
Thecloudstoragemarketattheindividualconsumerlevelhasseveralplayers.The
most popular include Dropbox, Microsofts OneDrive, Googles Drive, and Apples
iCloud (Griffith, 2014). These brands have different characteristics regarding the other
products they offer, how theyareaccessed(forexample, iCloudisautomaticallyinstalled
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on every iPhone while a Dropbox account must becreated),theirmarketingstrategy,and

their pricing. A starting point in investigating whether or not the consumers decision is
informed regarding cloud storage and how this decision process looks is to consider the
importance of the brand of the storage. The research question that will be investigated is
thefollowing:

Does the brand play an essential role in the consumers decision to use and purchase
cloudstorage?

Along with the increasing technological innovation and a more common use of big data
(Agrawal, Das, & Abbadi, 2011), cloud storage has become one of the most importanttoolsfor
informationstorage.
Cloud storage systems also play an important role in businesses management. A study
performed by KPMG revealed that organizations are turning to cloud toenableamoreflexible
and mobile workforce. Use of cloud systems increased employee productivity by54%,andled
toa48%higheremployeesatisfaction(KPMG,2014)
.
Cloud storage is also a topic of high scientific interest for researchers. Gurdev and
Rakesh analyzed the quality of six cloud storage systems based on five differentmetricsrelated
to their availability on the web, as well as its different facets (Singh & Kumar, 2012)
.
Multiple
research studies were conducted regarding the privacy and safety regulations of the cloud
(Ion,
Sachdeva, Kumaraguru, & Capkun, 2011)
. Taking into account theincreasingimportanceofthe
cloud systems, researchers began investigating the possibility of expanding the use of the
systems in higher education and research institutions, which could facilitate the storage of data
(van Hoboken, Arnbak, M., & van Eijk, 2012), as well as improve the mobility of work and
reducecostsduringtherecentfinancialcrisis(Mircea&Andreescu,2011).
General studies were also performed concerning the brand name of a product and its
influence on consumers brand memory (MeyersLevy, 1989), however no study analyzes the
presence of this effect in the cloudstorageindustry.Thispapercouldbeofimportanceforcloud
storage companies when considering future positioning of their brands as well as altering their
strategiesinregardofconsumerseducationrelatedtothecloud.

ResearchMethod
In order to answer the research question, asimplediscretechoiceexperiment(DCE)was
implemented. This typeofexperimentis basedonthelongstanding,welltestedtheoryofchoice
behaviour (McFadden, 1986). This theory proposes that thereisalatentconstructcalledutility
which exists for every person but cannot be directly observed by researchers. Whenonegivesa
consumer a discrete choice with the same product and attributes but with different attribute
levels, results of the subconscious utility can be obtained (Louviere, Flynn, & Carson, 2010).
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TheprogramJMPwillbeusedtoanalysedatathatis foundthroughtheabovementionedmethod.
This program enables one to easily import DCE data and has multiple functions for analysis
(Sall,Lehman,Stephens,&Creighton,2012).
Available data for this type of research is highly dependent on product attributes and
attribute levels. Therefore, this research was based on newly collected data,whichwasobtained
through an online questionnaire (descriptive research) using Qualtrics. The questionnaire
consisted of three sections. The first section presented a short introduction to the topic of cloud
computing and to the research. The second section comprises questionsaddressingage,whether
or not apersonalreadyusesaformofcloudcomputingandifsowhatbrand,thepointsofaccess
used, reasons for using cloud storage, and how highly a person values online safety of private
information on a scale of 110 (
Survey Questions in Appendix). These questions were used to
gain insight about the actual usage patterns of cloud storage consumers and to be able to draw
conclusions about the differences between the age groups. Thethirdsectionofthequestionnaire
had nine sets of discrete choices. The participants had to decide between three products with
differingattributelevels.
The population in question is individuals who access the internet regularly, as these are
the people who are able to access or be aware ofcloudstorageattheconsumerlevel.IntheEU,
the proportion of young people using cloud services for both storing and sharingfileswasmore
than three times higher than theproportionofolderpeopleusingtheseservices,sothefocuswill
be on young people below 30 years of age (Seybert, Reinecke, 2014). The questionnaire was
spread through the researchers personal networks, mainly through socialmediathesurvey was
activeforaperiodoffivedays.
ProductAttributes
In order to draw conclusions regarding a DCE with respect to the research question and
keeping the timeframe in mind, a limited amount of product attributes and attribute levels was
used.FortheproductCloudStorage,thisresearchmakesuseoffourattributes.
Brand Name
. As cloud storage is a relatively new market, consumers highly value the
name of the brand. It can portray the quality of the services, the safety of personal information,
andusingacertainbrandcouldalsoportraysocialeffects.Thelevels usedinthisresearcharethe
four biggest brands (Dropbox, Microsoft OneDrive,GoogleDrive,iCloud)andamadeupbrand
name (StorageCloud) which might enable this research to further elaborate on brand name
significance.
Price
. Every type of cloud storage comes with its own price tag. One consumer might
value brand name over price, while another is completely indifferent or simply chooses the
cheapest option. The levels used in this research are based on typical prices of current cloud
storageproviders:free,2permonth,5permonthand10permonth.
Size
. Different companies offer different amount of storage sizes for differentprices.Up
to what amount of money is the price worth the larger size? And when does brand name
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overshadow size? Sizes used are based on sizes of current cloud storage providers: 2GB, 5GB,
10GB,20GB.
Offline Mode
. A very important factor in choosing a cloud storage provider couldbethe
possibility to access your documents and other private informationatalltimesandallplacesvia
the internet, but also the possibility toaccessthatinformationwhenyouarenotconnectedtothe
internet. This attribute has two levels: yes if there is somekindofpossibilityofofflineaccess,
noifthereisnonewhatsoever.

Results
Demographics
In total, 122 people participatedintheresearchquestionnaire.110participantswereaged
1830 and 12 were older than 30 (
Table 1 in Appendix). The sample collected is made up of
individuals within the social networks of the researchers, and most respondents are students or
adults that arepersonallyconnected(directlyorindirectly)totheresearchersbutwhocomefrom
many different cultures (Dutch, American, French, Russian, Moldovan to name a few). This
sample is representative of the population because it spans the relevant age groupsandcaptures
variouspossiblecontextsofcloudstorageuse.
85 participants say they use a form of cloud storage. Out of the other37participants, 15
are sure that they do not use a form of cloud storage and 22 participants
are not aware of any
cloudstorageuse(
Table2
inAppendix).
More than 60% of the participants that use cloud storage do so through a personal
computer, and more than 50% through a mobile phone. The use of cloud storage via a tablet is
relatively low with only 20% of the participants using this point of access (
Chart 1a in
Appendix).
The most used brand for cloud storage is Dropbox, followed closely by Google Drive.
Both are used by 50 to 60 percent of the participants. Interestingly, 1 person opted to use our
fakebrandnameCloudStorage(
Chart1b
inAppendix).
The most important use of cloud storage is for storing photos and small amounts of
documents(40%+)(
Chart1c
inAppendix).
The participants in this survey put ahighvalue(averageof7outof10) totheamountof
risk they take when using cloud storage, meaning that they would very much like to know how
muchriskexactlytheyaretaking.18individualsputamaximumvaluetorisk.
There is no significant distinction between the two different age groups regarding the
brand used (bothpreferDropboxandDrive),butthepreferencesrelatedtopointsofaccessdiffer
slightly (
Table 3 in Appendix). An interesting result is thatnoparticipantsover30yearsolduse
cloud storage to store personal data, and the older age group also values the amount of risk
associatedtocloudstorageusemorethantheyoungeragegroup(
Table4
inAppendix).
JMP
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After having transformed the questionnaire data to fit into JMP, the program runs a
discretechoiceanalysis.Thisanalysisproducesthefollowingresults.
First of all, all product attributes appear to have a significant effect on consumer utility,
with price being extremely significant therefore all four attributes tested for are interesting for
this research. Concerning the effect of brand name on utility,DropboxandGoogleDrivehavea
positive effect with a margin of 0.507 and 0.292, respectively. Microsoft OneDrive, iCloud and
StorageCloud have a negative effect with a margin of 0.152, 0.218 and 0.420, respectively.
The margins appear to be bigger forthepricingattribute.Freecloudstorage hasapositiveeffect
on utility with a margin of 1.366 and a price of 2 euros per month is relatively neutral with a
margin of 0.073. Both a price of 5 euros and 10 euros per month have a negative effect on
consumer utility with margins of 0.434 and 1.005, respectively. The storage sizehasasmaller
effect on consumer utility. A small storage size of 2GB has a negative margin of 0.435. Both
5GB and 10GB appear to be neutral with margins of 0.054 and 0.014 respectively and only
20GB of storage space has a positive effect on utility with a margin of 0.503. Whether or not a
form of cloud storage has an offline modus has a positive effect if it does, but this is relatively
smallwithamarginof0.328(
Table5
inAppendix).

Conclusion
AccordingtoJMPsanalysis,themostdesirableproductoptionisafreeDropboxaccount
with20GBofstoragespaceandtheoptiontoworkoffline.
To answer the research question, the brand does indeed play an essential role in
consumers preferences regarding cloud storage. The brands Dropbox and Google Drive led to
very positive effects on utility compared to the others. Contrary to expectations, iCloud has a
negative effect on the participants utility. This could be due to the negative press related to
cloud storage leaks from Apples iCloud, although this cannot be verified. The researchers are
satisfied with the negative utility produced by the use of StorageCloud as this is a fake brand
madeupspecificallyforthisresearch.
Another finding is that price is a very important factor in selecting a type of cloud
storage. This is as expected, since the collective sample is relatively young and is likely to be
verypricesensitive.Infact,thetop19choicesoptionsarefree.
As expected, a larger amount of space and the ability to use the storage offline are
preferred.
Awarenesswithrespecttotheuseofcloudstorageindeedappearstobea problemamong
the participants, as seen by the uncertainty of some about whether or not they are using the
service and one participant stating thatheorsheusedStorageCloudeventhoughthatbranddoes
notexist.
Participants are concerned about the risk involved in using cloud storage which is likely
to affect their use of the services. This shows a gap between preferences and behavior, as one
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would expect that high concern regarding a service would lead to an effort to become more
awareaboutitandtobecomemoreinformedabouttheservicesoneuses.

LimitationsandImplicationsforFutureResearch
The performed study had several limitations that should be considered in any further
research. In the paper, descriptive research consisting of an online survey was conducted.
However, some of the questions in the second part of the survey could have been better
formulated. For example, the question related to the age of the respondent had just three
options(under181830over30).Perhaps, knowing theactualageofeachrespondentwouldbe
more helpful in analyzing the data and drawing conclusions about the research withinthe1830
age group. A common use of cloud storage was left out (sharing) and although several
respondents mentioned this use in the open partofthequestion,includingthisasachoicewould
have surely led to different results. The question about the risk related to cloud storage systems
was formulated vaguely, which may have confused the respondents. Future research could
directly address the safety concerns related to cloudstoragebyrephrasingthequestionas:Ona
scale of 110, how highly do you value the safety of ones private information?Also, more
questions concerning demographics (gender, ethnicity, occupation, an open question asking
about what influences the decision making process when choosing a particular cloud storage
system) could have been included in the survey to help controlforpotentialbiasesandgettinga
broader view of the problem. The reason behind theselimitationswasthetimeconstraintforthe
studythedataneededtobegatheredinaverylimitedamountoftime.
The survey also included a madeup brand StorageCloud which was primarily used to
investigate whether respondents awareness level about cloud storage systems is sufficient, as
well as whether respondents pay attention to the questionnaire. One of the respondents chose
StorageCloud as the program that he/she normally uses for datastorage,whichobviouslyshows
that the received responses from that individual are biased even though it does indicate a low
awarenesslevel.
Another limitation of the paper lies in the fact that thesamplewasnotfullyrandomized.
The online survey was distributed over social media channels, which implies that peers where
the main respondents to the survey. A different approach,suchasaskingpeopleonthe streetsto
fillinthesurvey,wouldprobablybemoreefficientinreachingamoredifferentiatedcrowd.
As an additional future implication, the researchers could perhaps try a different type of
statistical analysis, for example running regressions and observing ifthiswouldleadtodifferent
results compared to those presented in this research. This would, of course, require a different
typeofdatacollection.

ManagerialImplications

The presented study is of importance for cloud storage providers regarding the strategic
positioning oftheirbrandsandunderstandingtheirconsumers.Theresultsshowallthenecessary
informationaboutconsumerspreferencesinattributesrelatedtocloudstoragesystems.
First, addressing the problem of low awareness among consumers about theproduct,the
studyhadshownthat22respondentsoutof122arenotsurewhethertheyareusingacertaintype
of cloud storage or not (choosing the option Not that I am aware of), which implies that
approximately 18% of respondents do not clearly understand and know how exactly cloud
storage works. Besides the quantitative information collected through the survey, some
qualitative messages were received from the researchers (older) peers. Namely, an individual
stated that they had the intention of completing the surveybutstoppedhalfwaythroughbecause
they did not know enough about the topic even though they are surelyusingcloudstorage.This
could be an important implication for companies toconsiderwhendevelopinganewstrategyon
howtoeducatetheirtargetmarket.
The results also show that all four analyzed attributes are significant in relation to
consumer utility, thus different manipulations in relationtothepresentedattributescouldleadto
a higher (lower) consumption. It is clear that consumers would prefer to have a lower price,
higher storage space, and the opportunity to work offline in the system. Also, consumers prefer
cloud storages that belong to strong brands, thus they favour Dropbox and Google Drive to
MicrosoftOneDrive,iCloudandStorageCloud(fakebrand).
As participants highly value the risk associatedwithcloudstorage,companiescouldalso
invest in educating their users about the security of their stored or shared information and use
thisasadifferentiatingfactorfortheirbusiness.

Appendix
SurveyQuestions
Part1
Cloud storage allows an individual or a corporation to upload files to computer storage devices outside of their
network. These files are backed up automatically and can be accessed and shared anywhere where there is an
internetconnectionandadeviceabletoreadthedata.
Thefollowingquestionsareaboutyourpersonaluseofcloudstorageandshouldonlytakeafewminutes.
Thankyouinadvance!

Part2
Pleaseselectyouragerange.
Under18
Between18and30
Olderthan30

Doyoucurrentlyuseaformofcloudstorage?
Yes
NotthatIamawareof
Definitelynot

Whatbrandofcloudstoragedoyoucurrentlyuse?Youmaygivemultipleanswers.
GoogleDrive
MicrosoftOneDrive
iCloud
Dropbox
StorageCloud
Other,namely:

Howdoyouaccessyourcloudstorage?Youmaygivemultipleanswers.
Frommyphone
Frommypersonalcomputer
Frommyworkcomputer
Frommytablet
Other,namely:

Whydoyouusecloudstorage?Youmaygivemultipleanswers.
Tostorephotos
Tostorevideos
Tostoremusic
Tostoreasmallamountofdocuments
Tostorealargeamountofdocuments
Tostorepersonaldata
Other,namely:

Onascalefrom110,howhighdoyouvaluetheriskofcloudstorage?Ascoreof0
meaningyoudon'tthinkthereisanyriskatall,ascoreof10meaningyouthink
cloudstorageisvery,veryrisky.

Part3
In the next section you will be asked to choose one product out of three. These products may look a like, but for
everyproduct different product attributes are used. The productsarebasedonbrandname,pricepermonth,storage
sizeand whether or not the product hasanofflinemode,meaningtherearepossibilitiestouseyourdatawhenthere
isnointernetconnectionavailable.

Youwillbegiven9choicesets.

Pleaseselectyourmostpreferredproduct.(
Example
)
Brand:StorageCloud
Price:Free
Size:2GB
OfflineMode:Yes

Brand:MicrosoftOneDrive
Price:5.00p/m
Size:10GB
OfflineMode:No

Brand:iCloud
Price:10.00p/m
Size:20GB
OfflineMode:No

Chart1aPointsofaccess

Chart1bBrand

Chart1cTypeofinformationstored

Table1Numberofrespondentsperagegroup


Table2Dorespondentsusecloudstorage?

Table3Useofcloudstorage(as%ofthetotalnumberofrespondents)ondifferentdevices

Table4Valuationofriskrelatedtocloudstoragesystems(peragegroup)

Table5
Marginals

Bibliography

Seybert,H.,Reinecke,P.2014.Internetandcloudservicesstatisticsontheusebyindividuals.European
Commission.Statisticsinfocus.RetrievedFebruary13,2015,from
http://ec.europa.eu/eurostat/statisticsexplained/index.php/Internet_and_cloud_services__statistics_on_the_use_by_
individuals
.

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