UNDERSTANDING THE FACTORS OF CLOUD COMPUTING ADOPTION IN MALAYSIA

ABSTRACT

Cloud computing provides a new environment to enable resource sharing in terms of scalable infrastructures, middleware and application platforms as well as value-added business models. It offers the advantages of flexibility and scalability to business operations, reduction in total costs of computing, thus achieving higher return on investment. However, the technology raises pertinent concerns on security risk, data privacy, data segregation in the cloud and long-term viability of providers in which serve as the critical factors to organization in the process of embracing this technological advancement.

Owing to the potential for cloud computing, more research is needed to understand the factors influencing its adoption amongst the organizations in Malaysia. This study therefore aims to examine to what extent Malaysian companies adopt cloud computing, and how organizational factors, perceived characteristics of cloud computing, and environmental factors affect the adoption.

CHAPTER 1 : INTRODUCTION

1.0 Introduction

The computing industry is experiencing and witnessing a paradigm shift in the magnitude on how millennium computing is performed globally. The emergence of cloud computing has drastically changed the way information technology (IT) services are used, manipulated and operated within organizations. The primary obstacle in embracing and migrating towards IT appreciation in pursuing excellence and productivity within the overall business performance is non-other than the capital and operational expenditure investment to establish IT platform infrastructure. When the cost of computing increases due to complex information architecture and infrastructure that deters organizations from employing advanced IT services, the emergence of cloud computing provides and offers solutions to the problem by reducing upfront expenses of computing (Marston et al., 2011). In addition, cloud computing services are extensively used for financial analysis, medical information and diagnoses to online gaming. International Data Corporation (IDC) projects cloud services will outpace traditional IT spending by 2014 (Gens, 2010).

Cloud computing services involve a complex infrastructure of software, hardware, processing and storage integration (Maggiani, 2009). In addition, it can be consider as a relative new form of computing where scalable, elastic IT capabilities are delivered to customers using the Internet (Plummer, 2009). Clouds are defined as clusters of distributed computers, providing on-demand resources and services over a network, with the scale and reliability of a data centre (Grossman, 2009). According to Zhang and Zhou (2009), cloud computing provides an environment to enable resource sharing in terms of scalable infrastructures, middleware and application platforms and value-added business applications. Resources (e.g., CPU and

storage) in the cloud model are provided as general utilities that can be leased and released by users through the Internet in an on-demand fashion (Zhang, Cheng & Boutaba, 2010).

The primary business survival will highly dependable on its capability to balance off between the cost and productivity to generate extensive and scalable revenue or returns. The complexity and global competition is driving organizations to concentrate on the effort to reduce cost, increase profitability and enhance productivity ( Misra & Mondal, 2011; Sultan, 2009; Winans & Brown, 2009). The availability of Information Technology (IT) products, software and solutions offered by service provider made available across the globe had put tremendous pressure on organizations to choose and adopt the newest technology which enable them to achieve their corporate business philosophy of reducing cost, sustaining competitive edge, and improve the end result (Demirkan et. al., 2008;Gill,2011).

Cloud Computing is an innovation where information technology services and capabilities are integrated and delivered to an organization or individual over the internet by a centralized provider, often for a fee (Robinson, 2009). According to Gill (2011), cloud computing is a technology process for delivering highly scalable services enabling organizations to adapt to changing and challenging business requirements by easily acquiring and releasing computing services as needed.