The adoption of cloud computing in small and medium enterprises: a developing country

perspective
Abul Khayer, 2019

Despite the benefits of cloud computing, the rate of acceptance and use of this
technology is still unsatisfactory, particularly among SMEs (Kumar et al., 2017). The major
challenges towards the adoption of cloud technologies include lack of industry-specific
standards; the paucity of technology readiness (TR); unawareness about potential benefits of
this technology; lack of security and privacy; and the lack of trust (Lian et al., 2014). The modest
investment in technology by SMEs may affect their decision for not adopting cloud computing
(Abdollahzadehgan, 2013). In addition, potential risks related to the use of cloud services affect
cloud computing adoption. SMEs always remain to worry about the privacy and security of their
data stored in the third-party’s server. These concerns inhibit them from accepting and using
cloud computing.
Although cloud computing is getting popular to the researchers, understanding the
adoption behaviour of SMEs of cloud computing has not been sufficiently addressed in the
literature (Sharma et al., 2016), particularly in the developing country context. We found few
studies in the literature which can be further classified into three categories. First, we found
some technical studies which primarily focused on concepts and architectures of cloud
computing (Chen and Deng, 2009; Jadeja and Modi, 2012; Youseff et al., 2008). Second, some
descriptive studies were found which generally stated the definition, types, benefits, risks and
challenges of cloud computing (Carroll et al., 2011; Catteddu, 2009). Third, few theoretically
grounded studies were identified that investigate the determinants of cloud computing
adoption in SMEs (Gupta et al., 2013; Alshamaila et al., 2013; Doherty et al., 2015; Pathan et al.,
2017; Ooi et al., 2018). These studies were criticised for applying exploratory research (Doherty
et al., 2015), using small sample size (Alshamaila et al., 2013) and focusing developed countries
(Agostino et al., 2013). Moreover, most of the studies primarily have focused the initial adoption
of cloud computing in SMEs; there are few empirical studies on the utilisation of cloud services
in the literature. Specifically, the effect of cloud service adoption on firm performances (FPs) for
cloud-supported operations and processes is not sufficiently addressed in the prior studies.
Therefore, this research aims to examine the predictors of cloud computing adoption in SMEs,
and further to assess the impact of cloud computing adoption on cloud-supported competitive
performance.
This paper has developed the research model by combining two popular technology
adoption models, namely, unified theory of acceptance and use of technology (UTAUT)
(Venkatesh et al., 2003) and technology–organisation–environment (TOE) framework (Tornatzky
et al., 1990). Further, we extend our model to assess the impact of cloud adoption on
competitive FP. Many prior empirical studies claim that information technology (IT) assimilation
does not affect the FP directly, rather their relationship is mediated by other higher order
capabilities (Liu et al., 2013). For example, Felipe et al. (2019) claimed that information systems
(IS) capabilities influence FP through organisational agility (ORGA). Similarly, Sambamurthy et al.
(2003) revealed that knowledge management and agility are two mediators of IT capabilities
and FP relationship. Thus, we extend our model by adding ORGA as a mediator of cloud
adoption and cloud-affected FP.
 Cloud Adoption In Indian Smes – An Empirical Analysis
Jayalaxmi Padmanabha Shetty, 2022

Academic attention to Information and Communication Technology (ICT) has thrived well
in small and medium enterprises (SMEs) research (Jones et al., 2012). Two significant trends
concurrently have facilitated such research (Morgan-Thomas, 2015). One is the fast pace of
technology innovation fuelled by the permeating digital technologies. Another is the tall
business expectations leveraged by the benefits of digital opportunities. The evidence is shown
in the outburst of the Internet and the World Wide Web (Morgan et al., 2006). Future ICT
strategies will look at the cloud as a utility (Talapatra et al., 2018), similar to customers seeing
other utilities (e.g. water, electricity and gas) (Garg et al., 2013). Since it arrived in 2006, cloud
computing has become central to organizations worldwide and is listed as the fifth utility service
(Buyya et al., 2009). Cloud is a metaphor for the internet. In concrete terms, cloud computing
provides on-demand computing power, low operation and maintenance at a low cost (Sultan,
2014; Yang and Tate, 2012). Considering the flexibility of this emerging computing paradigm,
many organizations have seen possibilities, among which SMEs are one (Grubisic, 2014; Sultan,
2011).
The process of understanding cloud adoption in different geography is an emerging area
of research. The observed adoption patterns vary across regions, given their multitude and
dynamism (Rahman et al., 2020). In such complexities, allowance must be made for the
dissimilarity in the set of factors influencing the cloud adoption process in the same context and
to a catalog of factors that produce disintegrated findings (Talapatra and Uddin, 2019). Within
this, a city, a region or a nation other than the technologies can decide the growth opportunities
of a firm (Stam and van de Ven, 2019). In industrialized countries such as India, the adoption of
cloud computing is a strategic choice. SME owners do not doubt that cloud technologies
facilitate market entries and profits, yet they face challenges in evaluating cloud suitability and
the willingness-to-pay metrics (Shetty and Panda, 2021). Research in information technology
also impresses upon perceived costs and perceived benefits (Dwivedi et al., 2014; Talapatra et
al., 2019).
There are several reasons to pick India as geography. Looking at India, the end-user
spending on public cloud service will touch US$4.4bn, showing a growth of 31.4% (a Gartner,
April 2021 report). India has one of the largest SME populations (51.1 mn) by the NIFTY SME
index. The “Make in India” initiative by the government aims to boost the GDP contribution of
the manufacturing sector from 15 to 25% by 2022. Further, the Digital India program seems to
have a credible influence on the accomplishment of ICT initiatives (Shetty et al., 2020). The
cloud market can be defined as an infant in India because most SMEs are unaware of cloud
computing concepts.
There is limited research in this area that best explains cloud adoption decisions with
their perceived impact from a regional context. The present study fills the gap. We base our
study on the conceptual model by Shetty and Panda (2020). They propose that the impact of
cloud adoption on economic performance should be extended to a cross-section of the SME
industry in India. Therefore, our objective is to empirically validate an integrated model,
including the drivers and consequences of cloud adoption in the Indian context using data from
317 SMEs in India. The result draws attention to two factors that could not qualify as predictors
in the Indian SME segment. They are compatibility and competitive pressure. This can be
attributed to the inhibitions of the small firms and the attitudes and capabilities of single
owners. Evidence from the research model also revealed that the usage of load factors (e.g.
metrics for ROI) and system efficiency form a part of the technology system approach. The study
identified the two most viable measures in return on investment (ROI) and capital expenditure
(CAPEX).
This paper contributes to the existing literature by validating an empirical model
integrating both drivers and consequences of cloud computing adoption. From the research
standpoint, the integrated model can provide space for new dimensions based on the country’s
developing economy. This research work addresses the business aspect of the SME society
concerning the tangible and intangible benefits of cloud adoption. It directs the firm owners to
visualize business logic by creating a digital ecosystem. Further, the model guides the
stakeholders, including cloud service providers (CSPs), to contribute to the economic proficiency
of the SMEs.
The flow of the article is as follows. After the introduction, the second section presents a
review of the literature on relevant technology adoption theories. The third section formulates
hypotheses using an integrated framework. This is followed by research methodology, which
presents the survey using a deductive approach. Results and discussions follow in the fifth and
sixth sections, respectively. The article concludes with the implications of the findings and
future directions in the last section.

Preliminary insight into cloud computing adoption in a developing country

Prince Kwame Senyo and John Effah, 2015

Cloud computing has been described as a new development in the field of information
technology (IT) (Armbrust et al., 2009). With this advancement comes a huge potential which
businesses and governments in the developed world are already utilising to improve service
delivery and performance. Cloud computing basically entails the provision of IT as a service
rather than as a product. Cloud computing has been adopted in private, public, and non-profit
sectors in both industrialised and developing countries. However, the developed economies are
far ahead of the developing world in terms of adoption and use. In spite of the multitudinous
benefits associated with the cloud technology, its potential is yet to be realized in developing
countries.
Extant research into cloud computing adoption (CCA) in developing countries remains
limited. Conversely, determinants of CCA in the developed world is well established in
information systems literature. To large extent, the technological, organisational and
environmental (TOE) contexts of cloud computing between the developed and the developing
world differ. For example, the technological infrastructure in the UK, as a developed country is
far more advanced than that of Ghana, as a developing country. Moreover, it is well noted in the
general information systems literature that research findings from the developed world do not
directly apply to the developing world due to contextual differences (Avgerou, 2001; Effah,
2014; Heeks, 2002). Therefore given that CCA is well established in the developed world but not
in the developing world, this paper investigates the determinants of CCA in the developing
country context of Ghana.
The rest of the paper is set out as follows. Section 2 reviews relevant literature on trend
in and adoption of cloud computing, as well as presents a conceptual model based on the TOE
framework and ten hypotheses for testing. Section 3 presents the research methodology
detailing how data were gathered and analysed. Section 4 presents the findings while Section 5
discusses the findings. Finally, Section 6 concludes the study and provides contribution as well
as implications for future research directions.

Systems approach to cloud computing adoption in an emerging economy

Mahak Sharma, 2021

Information and communication technologies (ICTs) have led to the emergence of new
business models and changed our way of life. In the 70s, distributed computing enabled users to
break down a massive problem into several smaller tasks. Later, grid computing allowed the
decomposition of tasks into multiple networks coupled machines. However, issues related to
resource allocation during peak work periods persisted. This led to cloud computing (CC)
development in 2007, making services available on-demand as other utility services like gas,
electricity, water and telephony. However, the low penetration of essential services (healthcare,
education and banking) in India presents an opportunity to provide timely and cost-effective
solutions over the cloud (Ratten, 2016b; Raut et al., 2018). The increasing digitization has led to
the acceptance of apprehensions linked with security aspects, data ownership and quality of
service (Tandon et al., 2020).
With shorter technology and product lifecycle, it is difficult for organizations to develop
technological capability and gain competence in all domains catering to enormous business
opportunities in a cost-effective way (Priyadarshinee et al., 2017). CC provides benefits by
enabling organizations to reduce their operating costs, improve time efficiency, and gain
technical competency through swift procurement and usage of infrastructure, software, and
platform services as per their need. It is also forecasted that spending on CC in India can be
approximately $4.1 billion in 2021, an increase of 29.4% from 2020 [1]. It is worth noting that
presently most of the organizations invest heavily in purchasing hardware, building floor space,
ensuring adequate power and cooling systems for servers, provisioning the network, and
securing backup power, which is a challenge in developing countries, especially in India (Misra
et al., 2011; Sharma and Sehrawat, 2020a). It has been found that large enterprises spend 2–4%
of their budget on information technology (IT) data recovery planning, while small and medium
enterprises (SMEs) spend up to 25% (Misra et al., 2011). Adopting CC and delivering services
using it can be considered a strategic move by ICT firms to sail through technological turbulence
for competitive advantage. Also, CC can revolutionize and lead to proliferation of digital
technologies such as cognitive computing which can assist firms in analyzing patterns to
enhance business opportunities with the help of real-time process- centric data (Behera et al.,
2019; Daim, 2020; Daim et al., 2020). However, within the Asia Pacific region, India faced a
decline in Cloud Readiness Index in the year 2018 [from rank 9 (in 2012) to rank 12 (in 2018)]
(ACCA, 2018). Also, revenue from public cloud in India is 1.2% of the total worldwide revenue
(India USD 2.4 Billion), indicating that adoption of CC is not happening at an expected pace
(Gartner, 2019).
The previous works have recommended CC as a way to resolve critical challenges faced
by the ICT sector, yet prior research has made limited attempts to holistically encapsulate the
available extant knowledge related to this phenomenon (Arora and Rahman, 2017; Njenga et
al., 2019). Hence, this research focuses on adoption of CC in emerging countries, that is, India,
where this innovative technology has not been as extensively adopted as in other parts of the
globe. A comprehensive list of factors can impact a firm’s decision to shift on cloud (Arvanitis et
al., 2017; Sharma and Sehrawat, 2020b). Thus, this study aims to explore why adoption of CC is
low or slow in the Indian context and investigate factors and their holistic influence on adoption
of cloud computing.
In line with the above background, the research has three primary research objectives
(RO) – RO1: to explore the factors influencing CC adoption; RO2: to identify causal relationships
among the identified factors; RO3: to model the interrelationships using causal loop
diagramming. To fulfill the objectives of this research, the authors have used descriptive
qualitative research design.
This paper is structured as follows: Section 2 presents a review of the literature on
technology adoption, and its factors associated especially with CC adoption is outlined next. The
research methodology in Section 3 reports research design and the detail of qualitative
interviews. Further, data collection is presented in Subsection 3.2. Data analysis and findings are
presented in Section 4. Finally, in Section 5, discussions are presented, followed by conclusions
in Section 6. The theoretical and practical implications are discussed in Subsection 6.1 and 6.2,
respectively. Finally, the limitations and future research avenues are presented in Section 7.

To Merge

Cloud computing has been adopted in private, public, and non-profit sectors in both
industrialized and developing countries, although developed economies are far ahead of the
developing world in terms of adoption and use (Prince Kwame Senyo and John Effah, 2015).
Thus, in spite of the multitudinous benefits associated with the cloud technology, its potential is
yet to be realized in developing countries, Prince Kwame Senyo and John Effah, 2015,
particularly among SMEs (Kumar et al., 2017). Thus, despite recommendations that cloud
computing can help address challenges faced by the IT sector, there has been limited research
comprehensively analyzing its adoption, particularly among SMEs including in Zimbabwe
context. (Arora and Rahman, 2017; Njenga et al., 2019). Moreover, although it has been
popular among IT sector in developed countries industries, the IT sector in Zimbabwe has been
slow in fully adopting it.

Understanding cloud adoption in different regions and sectors is a new area of research, as
cloud adoption patterns vary across regions and industries, and there are various factors that
influence the adoption process (Jayalaxmi Padmanabha Shetty, 2022). Therefore, this research
focuses on the adoption of cloud computing in IT SMEs in Zimbabwe where this innovative
technology has not been as extensively adopted as in other parts of the world. The study
chooses to focus on IT SMEs in Zimbabwe because of their crucial role in innovation and
technology transfer. By embracing cloud computing, these enterprises can develop new and
innovative products, services, and processes that help improve productivity and efficiency
across different sectors of the economy. Furthermore, by leveraging cloud computing, ICT SMEs
can create innovative products, services, and processes that enhance economic growth, enable
access to global markets, generate foreign exchange, improve Zimbabwe's balance of trade,
provide local communities with knowledge and skills, promote social and economic
development, and close the digital divide.
The research employs a conceptual model integrating both drivers and consequences of
cloud computing adoption. The conceptual model is a combination of two renowned
technology adoption models, the Technology Acceptance Model (TAM) and the Technology-
Organization-Environment (TOE) framework. By doing so, the study aims to contribute to the
existing literature on cloud computing adoption by providing a comprehensive understanding of
the factors that influence adoption in Zimbabwe's IT SMEs context.

While there exist research on cloud computing adoption in SMEs in Zimbabwe context, there it’s
a lack of research specific to cloud computing adoption within IT SMEs. Moreover although
these, Previous studies have examined the determinants, benefits, threats, and barriers to cloud
computing adoption in developing countries including Zimbabwe, using various technology
adoption frameworks, not limited to DOI, TOE, TPB, TAM and contextualized frameworks.
However it is crucial to acknowledge that the technology itself and the world is constantly
evolving presenting new trends, benefits, and challenges, thus demanding constant repetition
of these studies. Therefore, ongoing research employing different frameworks tailored to the
unique characteristics of the study in question is necessary to identify and address emerging
trends, benefits, and challenges associated with cloud computing adoption in developing
countries.
The process of understanding cloud adoption in different geography is an emerging area of
research. The observed adoption patterns vary across regions, given their multitude and
dynamism (Rahman et al., 2020). In such complexities, allowance must be made for the
dissimilarity in the set of factors influencing the cloud adoption process in the same context and
to a catalog of factors that produce disintegrated findings (Talapatra and Uddin, 2019). Within
this, a city, a region or a nation other than the technologies can decide the growth opportunities
of a firm (Stam and van de Ven, 2019). In industrialized countries such as India, the adoption of
cloud computing is a strategic choice. SME owners do not doubt that cloud technologies
facilitate market entries and profits, yet they face challenges in evaluating cloud suitability and
the willingness-to-pay metrics (Shetty and Panda, 2021). Research in information technology
also impresses upon perceived costs and perceived benefits (Dwivedi et al., 2014; Talapatra et
al., 2019).
There are several reasons to pick India as geography. Looking at India,
There is limited research in this area that best explains cloud adoption decisions with
their perceived impact from a regional context. The present study fills the gap. We base our
study on the conceptual model by Shetty and Panda (2020). They propose that the impact of
cloud adoption on economic performance should be extended to a cross-section of the SME
industry in India. Jayalaxmi Padmanabha Shetty, 2022

This led to cloud computing (CC) development in 2007, making services available on-demand as
other utility services like gas, electricity, water and telephony Mahak Sharma, 2021

Therefore, when studying cloud adoption patterns, researchers must consider the
various contextual factors that can impact a firm's decision to adopt cloud computing. This
includes factors beyond the technology itself, such as the economic and political conditions of a
city, region, or nation, that can impact the growth opportunities of a firm in relation to cloud
adoption. Jayalaxmi Padmanabha Shetty, 2022