A Deeper Look at Cloud Adoption Trajectory and Dilemma

• Published in: Information systems frontiers 2022-02, Vol.24 (1), p.177-194
• Main Author: Hsu, Pei-Fang
• Format: Article
• Language: English
• Subjects: Business and Management; Cloud computing; Control; Dependency theory; Incentives; Influence; Information systems; IT in Business; Management of Computing and Information Systems; Operations Research/Decision Theory; Outsourcing; Structural equation modeling; Systems Theory
• ISSN: 1387-3326; 1572-9419
• DOI: 10.1007/s10796-020-10049-w

Different from previous cloud adoption studies that focus on the benefits and concerns of cloud computing from a technology point of view, this study takes a deeper look at two additional firm-specific forces that could better explain firms’ cloud adoption trajectory and dilemma: Path dependency and Institutional forces . Path dependency theory argues that if a firm has invested intensively in traditional IT, it may be more capable of adopting and utilizing new IT since it has accumulated knowledge. However, the firm could also be trapped in its previous path and reluctant to migrate to cloud to avoid sunk costs and switching costs. On the other hand, institutional theory provides an external view and posit that a firm facing more institutional forces from its trading community will have more incentives, as well as pressure, to adopt cloud. We developed a cloud adoption model that features benefits, concerns, path dependency, and institutional forces as prominent antecedents to understand their competing and complementary effects, and empirically tested the proposed model using 177 firms. The results show that, path dependence is indeed an important factor affecting firms’ cloud adoption behaviors; a firm with a better IT position and more satisfying IT outsourcing experiences will have greater cloud adoption intention. Institutional forces do not directly affect cloud adoption intention. Instead, institutional forces increase perceived benefits, through which, indirectly influence cloud adoption intention. The findings delineate the trajectory and dilemma that firms face when migrating to cloud and provide insights to cloud vendors in choosing their target market.