An Integrated Conceptual Framework of Cloud Computing Adoption in Small and Medium-sized Enterprises in India

Abstract

Cloud computing is an innovative way of delivering relevant information and communication technologies (ICTs) to customers on demand and on a pay-per-usage basis throughthe internet. By using cloud computing, organizations get easy and affordable access to the latest ICTs, which subsequently help enterprises in refining their internal business procedures, enabling quicker communication with clients and improved and wider market reach. Besides providing relevant ICTs to the organizations in a cost effective manner, cloud computing offers various other benefits in the form of improved business continuity and back-up, easier implementation and maintenance process, and automatic provisioning of ICT resources as per the demand. All these benefits make cloud computing an attractive option for all such organizations which are looking for making optimum utilization of latest ICT without making heavy investments. Small and Medium-sized Enterprises (SMEs) in developing economies like India face many challenges in the form of limited capital, lack of skilled manpower, and low ICT usage. Due to these constraints, SMEs are not able to reap various benefits which modern ICT solutions offer. In such a scenario, cloud computing can be an appropriate option for such SMEs which are looking for improving their internal processes, communication with clients and business partners, and market reach through modern ICT solutions at minimum cost and efforts. Cloud computing thus, has a special significance for SMEs. Cloud computing, especially the public cloud, is particularly beneficial for such organizations which have limited finances, expertise and other resources required for implementing and using relevant ICTs. In spite of many benefits, the literature suggests that a very few SMEs have adopted cloud computing in developing economies like India (Malviya and Chakarborty, 2013; Bhat, 2013). Due to the novelty of this innovation which is rapidly evolving, a limited number of studies are there in the literature on cloud computing adoption by SMEs, especially in a developing economy context like India. Various theoretical models, constructs, and methodologies are used by researchers to assess important factors influencing adoption of cloud computing by SMEs (Al-Isma'iliet al., 2016; Prasad & Green, 2015; Khan and Al-Yasiri, 2016; Abdullah & Hassan, 2015; Alshamailaet al., 2013). However, no studies are found on cloud computing adoption by SMEs in an Indian context that are established on a strong theoretical basis, which incorporate all the important factors relevant to the situation and which are empirically tested using powerful statistical techniques like structural equation modeling. This study is an attempt towards assessing important factors influencing SME’s intention to adopt cloud computing in an Indian context. A comprehensive and integrated model founded on Technology Acceptance Model (TAM), Diffusion of Innovation (DOI) theory, and Technology-Organization-Environment (TOE) framework is developed to assess the determinants of cloud computing adoption among SMEs. Data collected from 298 SMEs in India is used for this purpose. Structural equation modeling and confirmatory factor analysis are used to test model fit and to examine the related hypotheses. The results indicate that external pressure, service providers’ support, top management support, relative advantage, and security and privacy are the important determinants of cloud computing adoption among SMEs. The study is thus, a distinct attempt and important contribution towards understanding the adoption of innovations like cloud computing among SMEs.