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Article history:
Received 29 January 2013
Received in revised form 26 March 2014
Accepted 29 March 2014
Available online 6 April 2014
Many factors inuence the adoption of cloud computing. Organizations must systematically evaluate
these factors before deciding to adopt cloud-based solutions. To assess the determinants that inuence
the adoption of cloud computing, we develop a research model based on the innovation characteristics
from the diffusion of innovation (DOI) theory and the technology-organization-environment (TOE)
framework. Data collected from 369 rms in Portugal are used to test the related hypotheses. The study
also investigates the determinants of cloud-computing adoption in the manufacturing and services
sectors.
2014 Elsevier B.V. All rights reserved.
Keywords:
Cloud computing
IT adoption
Diffusion of innovation (DOI)
Technology-organization-environment
(TOE)
1. Introduction
Large and small enterprises are rapidly reorienting their overall
information technology (IT) strategies to include cloud computing.
As the strategic emphasis on exibility, innovation, and economic
gains increases, organizations can no longer overlook the
advantages of the computational agility and scalability provided
by a distributed cloud-computing environment [5,36,16]. With the
potential to transform business processes, lower IT expenditures,
deliver real-time applications, offer access to ubiquitous storage,
unlimited computing power, and market information mobilization, organizations look to cloud-based solutions to achieve
business efciencies [16,65,100,6,37]. Thus, companies are seriously considering increasing IT expenditures on cloud computing
[30].
Despite the touted advantages of this new technology, evidence
suggests that not all companies are rushing to adopt cloud-based
solutions [1,105]. Among the reasons are that it is a disruptive
technology that has not reached a level of maturity; the lack of
industry-specic conformity to standards; and a high level of
related risk and costs [9,12,70]. In addition, rms in certain sectors
may have only a modest investment in technology. Examples
include small and medium enterprises (SME) in supply chaincentric industries such as manufacturing, agriculture, and construction [1]. They have limited technical capabilities and often
rely on smaller groups of IT professionals or contract IT staff for
their IT needs. The reluctance to adopt cloud computing solutions,
a disruptive technology in the technology trigger or the inated
expectations phase of the hype-cycle [30,38], are therefore real
and noteworthy.
Clearly, the cloud phenomenon is not a panacea for all
organizations. The purpose of this study is to understand the
determinants of the adoption of cloud computing and its relative
advantage to organizations. Most earlier studies on cloud
computing have focused on technical and operational issues
[119]. A few studies have addressed the adoption of cloud
computing from an organizational perspective (see Table 1),
mostly assessing the direct effects of the innovation characteristics
or the contextual factors. No study has conducted a holistic
evaluation of the direct effects and the indirect effects of the
determinants on cloud-computing adoption. Motivated by these
issues, this study seeks to develop a research model that integrates
the innovation characteristics [91] of cloud computing and the
technology-organization-environment (TOE) perspectives [104]
that underlie its adoption. The contribution of the article is
twofold. First, to investigate the direct and indirect effects of the
innovation characteristics and the TOE contexts on the adoption of
cloud computing, data from 369 rms in Portugal are used to
evaluate the research model. This study therefore presents a more
498
Table 1
Cloud computing studies published in peer reviewed journals.
IT adoption
(dependent
variable)
Adoption theory
Methods
Author
Cloud computing
Factor analysis
(FA), logistic
regression
[65]
Cloud computing
TOE
Conceptual
Conceptual model
[1]
Cloud computing
[117]
TOE
Conrmatory factor
analysis, multiple
regression analysis
Partial least
squares (PLS)
Intention to adopt
cloud computing
[82]
Cloud computing
DOI
19 IT professionals, Taiwan
[60]
Cloud adoption
[106]
Institutional theory
Semi-structured
qualitative
interview
Qualitative and
quantitative
methodology
Conceptual
[54]
Note: Diffusion of innovation (DOI); technology-organization-environment (TOE); information processing view (IPV).
499
adoption. Nkhoma and Dang [82] used secondary data from the
survey of a large services company to study the drivers and barriers
to cloud computing adoption. Wu et al. [117] investigated whether
the information processing requirements and capacity affect the
rms intention to adopt cloud computing; they used the DOI
theory and information processing view (IPV) to conduct their
study in the supply chain domain. Abdollahzadehgan et al. [1]
proposed using the TOE framework to evaluate the barriers to
cloud computing adoption in SMEs; their study did not include
hypothesis testing or empirical validation. Kshetri [53] used the
institutional theory to investigate the perception and security
issues based on the context provided by formal and informal
institutions; no empirical assessment was provided.
The review of published journal articles indicates that most
studies empirically evaluate the direct effects of innovation or
contextual factors or conduct analysis using qualitative methods or
secondary data on the adoption of cloud computing. No study has
taken a holistic approach to empirically validate the direct and
indirect effects of the innovation characteristics and the underlying technology, organization, and environment contexts. Yang and
Tate [119] voice similar concerns by classifying the published
journal articles on cloud computing into four research themes:
technological, business issues, domains and applications, and
conceptualization. Based on a descriptive literature review of 205
refereed journal articles, their study indicates that research on
cloud computing is skewed mostly toward technological issues.
They highlight the paucity of cumulative research to address the
social, organizational, and environmental perspectives of cloud
computing. In this study we address this crucial research gap by
developing an integrative research model that combines the
theoretical perspectives of the diffusion of innovation and the
technology, organization, and environment contexts. We use the
model to holistically evaluate the determinants of cloud computing adoption in an organization.
2.4. Combining DOI and TOE
Many researchers have called for approaches that combine
more than one theoretical perspective to understand the IT
adoption of innovative new technologies [85,117,33,67]. To better
understand the organizational decisions related to the adoption of
technological innovation, the context of the study should be
comprehensive and the variables tailored to the specicity of the
innovation [19]. DOI and TOE have been used extensively in IT
adoption studies, and have enjoyed consistent empirical support.
In many ways, the TOE perspectives overlap with the
innovation characteristics identied by Rogers. Therefore, the
value of incorporating the TOE contexts to strengthen the DOI
theory is well-recognized [85,117,19,47]. The technology context
is implicitly the same idea as that of Rogers [91]. DOIs internal and
external organizational characteristics include the same measures
as TOEs organization context [47]. There are also important
differences between the two theories. TOE does not specify the role
of individual characteristics (e.g., top management support). Here,
the DOI theory suggests the inclusion of top management support
in the organization context. Similarly, DOI does not consider the
impact of the environmental context. Because of DOIs shortcomings, the TOE framework helps to provide a more comprehensive perspective for understanding IT adoption by including the
technology, organization, and environment contexts [123]. The
theories thus meaningfully complement each other [85].
To identify the constructs of the integrative research model, we
used the DOI theory and the TOE framework as the basis to conduct
an elaborate search of scholarly databases, including EBSCOHosts
Academic Search Complete and Business Source Complete, all
databases within Proquest (e.g., ABI/INFORM Complete), databases
500
Table 2
Model constructs from DOI theory and/or TOE framework in peer reviewed journals.
Model/theory
Technology/
dependent variable
Source Constructs
Security Comp.
Reg.
Firm Cost
Top
Rel.
Compatibility Complexity Tech.
concerns pressure support
readiness size savings mgmt.
advantage
support
TOE
DOI and TOE
and others
DOI and TOE
TOE and DOI
and others
DOI and TOE
DOI
DOI
TOE
TOE
TOE
TOE
TOE
TOE
TOE and others
TOE
DOI and TOE
TOE
TOE
DOI and TOE
TOE
DOI and others
DOI
[19]
[3]
[7]
[13]
Collaborative commerce
adoption
RFID adoption
Internet-based purchasing
application assimilation
E-commerce adoption
Internet/E-business adoption
Electronic data interchange
(EDI) adoption
Knowledge management and
enterprise systems adoption
RFID adoption
E-business adoption
E-business adoption
E-business use
E-business use
E-business initiation,
adoption, routinization
Intention to adoption
cloud computing
Cloud computing adoption
Cloud computing adoption
Cloud computing adoption
Cloud computing adoption
[23]
[107]
[52]
[39]
[48]
[55]
X
X
[89]
[102]
[61]
[83]
[121]
[123]
[124]
X
X
X
X
X
X
X
X
X
X
X
X
X
X
[82]
[65]
[1]
[117]
[59]
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
within PsycNet, and Google Scholar. We then grouped the wellcited studies to determine the most representative factors
evaluated in the published literature on adoption studies. Finally,
we examined each construct to determine its applicability to cloud
computing adoption. Table 2 summarizes the factors identied by
this systematic approach and the dependent variable they
measure.
Among the ve attributes of DOI, three innovation characteristics are applicable to cloud-computing adoption: relative
advantage, complexity, and compatibility. Trialability and observability are not widely used in IT innovation studies [23]. Thus,
following the general guidance of IS research, we disregard those
two attributes because they are not relevant to cloud-computing
technology. Rogers [91] states that the nature of the innovation
determines the type of relative advantage that is important to the
adopter and that the relative advantage of the innovation can be
expressed as economic protability, as conveying social prestige,
or in other ways. [91] In the context of our study, we posit that
cloud computing may lead to the economic advantage of cost
savings [65,49]. Similarly, security concerns may diminish the
relative advantage of cloud computing. We therefore include two
additional variables, namely, cost savings and security concerns as
antecedents to the relative advantage of cloud computing. They
determine whether cloud computing will be relatively advantageous if it provides cost savings and less advantageous if there are
security concerns.
From the TOE framework, the technology context determines
whether the technological readiness of the rm will constrain or
facilitate the adoption of cloud computing. Factors specic to the
organization context are top management support and rm size.
501
502
4. Research methodology
4.1. Measurement
4.2. Data
An online version of the questionnaire was emailed to qualied
individuals (CIOs, directors, and senior IS managers) at 2000
manufacturing and service companies in Portugal. The company
and contact data were provided by Dun & Bradstreet, one of the
worlds leading sources for commercial information and insight on
businesses. Data were collected using an online questionnaire
administered in two stages from mid-2012 to early 2013. The
study utilized the key informants approach for data collection
[8,4] to identify the respondents in the organization who are most
involved in and knowledgeable about cloud computing. To target
respondents who assume the role of key informant, we provided a
clear description of cloud computing and gave examples. To
increase content validity, we indicated that the survey should be
lled out by the individual in the organization who is most familiar
Table 3
Sample characteristics (N = 369).
By industry
Manufacturing
Construction
Production industry
Services sector
Services (hotel, recreation, banking, real estate)
Health
Commerce
Information and communication
By rm size
Micro
Small
Medium
Large
By respondents position
33
107
8.94%
29.00%
173
16
32
8
46.88%
4.34%
8.67%
2.17%
32
100
170
67
8.67%
27.10%
46.07%
18.16%
8
108
32
81
30
44
66
2.17%
29.27%
8.67%
21.95%
8.13%
11.92%
17.89%
Security concerns
Cost savings
Relative Advantage
Complexity
Compatibility
Technology readiness
Top management support
Firm size
Competitive pressure
Regulatory support
Cloud computing adoption
503
Table 5
Reliability indicators for full sample and sub-samples.
Full sample
(n = 369)
Manufacturing (n = 140)
Service
(n = 229)
Mean
SD
Mean
SD
Mean
SD
3.76
3.14
3.33
2.26
2.90
4.27
2.89
2.54
2.30
2.58
2.40
1.11
0.79
0.87
0.80
0.80
1.19
0.96
0.86
0.86
0.85
1.61
3.65
2.93
3.13
2.41
2.77
3.88
2.80
2.55
2.22
2.55
2.14
1.17
0.82
0.85
0.83
0.80
1.24
0.95
0.77
0.78
0.86
1.49
3.83
3.27
3.44
2.17
2.98
4.54
2.94
2.54
2.36
2.60
2.56
1.06
0.75
0.86
0.77
0.80
1.10
0.97
0.91
0.90
0.85
1.66
Full sample
Constructs
Security concerns
Cost savings
Relative advantage
Complexity
Compatibility
Technology readiness
Top management support
Firm size
Competitive pressure
Regulatory support
Cloud computing adoption
Sub-sample
manufacturing
Sub-samserple
vices
AVE
CR
AVE
CR
AVE
CR
0.90
0.71
0.77
0.72
0.67
0.59
0.74
0.80
0.72
0.88
0.92
0.96
0.88
0.94
0.91
0.91
0.81
0.89
0.89
0.88
0.93
0.96
0.93
0.74
0.79
0.75
0.70
0.63
0.72
0.82
0.68
0.91
0.89
0.98
0.90
0.95
0.92
0.92
0.84
0.88
0.90
0.87
0.95
0.94
0.87
0.68
0.75
0.68
0.66
0.53
0.75
0.79
0.73
0.85
0.93
0.95
0.87
0.94
0.89
0.90
0.77
0.90
0.88
0.89
0.92
0.96
should satisfy one of the two following conditions: (1) ten times
the largest number of formative indicators used to measure one
construct; or (2) ten times the largest number of structural paths
directed at a particular latent construct in the structural model
[116,90]. Our sample consists of 369 rms, thus meeting the
necessary conditions for using PLS. Smart-PLS software [90] was
used to assess the reliability and validity of the measurement
model before testing the various structural models. A two-fold
analysis approach was taken to evaluate the research model. To
understand the key determinants of cloud adoption, we conducted
a quantitative assessment of the full sample. To investigate how
the determinants vary across different industries, we analyzed the
sub-samples of the data for the manufacturing and services
sectors.
5.1. Measurement model
The measurement model results (reliability, validity, correlations, and factor loading) are shown in Tables 5 and 6 and
Appendix B. The reliability of the scales was tested using composite
reliability (CR) (Table 5). For the full sample and the industryspecic samples, the results are higher than 0.7, suggesting that
scales are reliable [45]. To ensure a sufcient degree of convergent
validity, it is desired that the average variance extracted (AVE) value
be greater than 0.50 [34]. Measurement models for both industries
demonstrate convergent validity (Table 5). All items for both the full
sample and the industry-specic sub-samples have loadings greater
than 0.7 and are statistically signicant at the 0.01 level (see
Appendix B). Therefore, all items are retained. Finally, the
discriminant validity of the constructs was assessed using two
measures, FornellLarcker criteria and cross-loadings. The rst
Table 6
Correlations and AVEs.
Constructs
1. Security concerns
2. Cost savings
3. Relative advantage
4. Complexity
5. Compatibility
6. Technology readiness
7. Top management support
8. Firm size
9. Competitive pressure
10. Regulatory support
11. Cloud computing adoption
0.95
0.33
0.28
0.02
0.17
0.36
0.22
0.24
0.07
0.01
0.26
3
0.85
0.67
0.20
0.64
0.38
0.46
0.14
0.37
0.35
0.40
0.88
0.17
0.67
0.35
0.44
0.15
0.45
0.41
0.42
0.85
0.24
0.19
0.17
0.15
0.01
0.01
0.23
0.82
0.35
0.48
0.04
0.51
0.44
0.40
0.77
0.46
0.31
0.28
0.15
0.44
0.86
0.18
0.43
0.25
0.50
0.89
0.12
0.03
0.29
10
11
0.85
0.34
0.34
0.94
0.13
0.96
Note: The diagonal in bold is the square root of the average variance extracted (AVE). These results are for the full sample only. The results for sub-samples are identical and
available from the author on request.
504
Table 7
Relevant constructs for the structure model.
Constructs
Manufacturing
(n = 140)
sub-sample
T-Value
Path coeff.
T-Value
Path coeff.
T-Value
1.540
15.773***
0.059
0.645
0.770
10.739***
0.079
0.627
1.480
11.097***
R2 = 0.446
2.358**
1.970*
1.173
3.569***
4.918***
3.071***
1.606
1.618
0.351
0.031
0.071
0.197
0.157
0.152
0.098
0.084
1.232
2.420**
0.021
0.227
R = 0.381
R = 0.361
R2 = 0.429
3.060***
0.420
0.509
2.178**
1.587
1.694*
1.021
0.884
0.085
0.114
0.123
0.157
0.325
0.119
0.081
0.075
0.712
3.012***
0.007
0.053
1.087
2.004**
1.655*
2.795***
5.121***
2.394**
1.193
1.216
0.678
1.056
2
R = 0.408
statistically signicant (p > 0.10) for the full sample. The research
model explains 38.1% of cloud-computing adoption. The ndings
indicate that the research model is signicant in explaining the
adoption of cloud computing by rms.
The examination of R2 as a descriptive measure for the industryspecic sub-samples shows that security concerns and cost savings
explain 44.6% and 42.9% of the relative advantage of cloud
computing for the manufacturing and services sectors, respectively. For both the sub-samples, the hypothesis of cost savings as a
predictor of the relative advantage of cloud computing (H1a) is
conrmed (p < 0.01). The hypothesis of security concerns (H1b)
(p > 0.10) is not conrmed for either of the sub-samples.
For the manufacturing sector sub-sample, the following ndings
are noteworthy. Hypotheses for relative advantage (H1) (p < 0.01),
technology readiness (H4) (p < 0.05), and rm size (H6) (p < 0.01)
are conrmed. Complexity (H2), compatibility (H3), top management support (H5), competitive pressure (H7), and regulatory
support (H8) are not statistically signicant. The indirect effect of
cost savings for the manufacturing sub-sample is 0.227
(0.645*0.351), and is statistically signicant (p < 0.01), whereas
the indirect effect of security concerns is found to be not statistically
signicant. This indicates that cost savings not only explains relative
advantage but also that it indirectly inuences cloud-computing
adoption. The research model explains 36.1% of cloud-computing
adoption among rms in the manufacturing sector.
For the services sector sub-sample, complexity (H2) (p < 0.05),
compatibility (H3) (p < 0.10), technology readiness (H4)
(p < 0.01), top management support (H5) (p < 0.01), and rm size
(H6) (p < 0.05) are conrmed. The relative advantage (H6),
competitive pressure (H7) and regulatory support are not
statistically signicant. For the services sector, the indirect effect
of cost savings is 0.053 (0.627*0.085) and 0.007 (0.079*0.085) for
security concerns. The results indicate that cost savings and
security concerns are not statistically signicant (p > 0.10) for the
services sector. The research model explains 40.8% of cloudcomputing adoption among rms in the services sector.
6. Discussion
Understanding the determinants of cloud computing is paramount as organizations consider the adoption of cloud computing
505
506
507
Table 8
Measurement items.
Constructs
Items
Adapted source
Security concerns
SC1 Degree of companys concern with data security on the cloud computing
SC2 Degree of concern for customers with data security in cloud computing
SC3 Degree of concern about privacy in cloud computing
CS1 The benets of cloud computing are greater than the costs of this adoption
CS2 With cloud computing there is a reduction of energy costs and environmental costs
CS3 Maintenance costs of cloud computing are very low
RA1 Cloud computing allows you to manage business operations in an efcient way.
RA2 The use of cloud computing services improves the quality of operations.
RA3 Using cloud computing allows you to perform specic tasks more quickly.
RA4 The use of cloud computing offers new opportunities.
RA5 Using cloud computing allows you to increase business productivity.
CX1 The use of cloud computing requires a lot of mental effort.
CX2 The use of cloud computing is frustrating.
CX3 The use of cloud computing is too complex for business operations.
CX4 The skills needed to adopt cloud computing are too complex for employees of the rm.
C1 The use of cloud computing ts the work style of the company.
C2 The use of cloud computing is fully compatible with current business operations
C3 Using cloud computing is compatible with your companys corporate culture and value system.
C4 The use of cloud computing will be compatible with existing hardware and software in the company.
TR1 The percentage of employees who have Internet access.
TR2 The company knows how IT can be used to support operations.
TR3 Within the company there are the necessary skills to implement cloud computing.
TMS1 The companys management supports the implementation of cloud computing.
TMS2 The companys top management provides strong leadership and engages in the process when it
comes to information systems.
TMS3 The companys management is willing to take risks (nancial and organizational) involved in the
adoption of cloud computing.
FS1 The number of company employees.
FS2 Annual business volume.
CP1 Firm thinks that cloud computing has an inuence on competition in their industry.
CP2 Our rm is under pressure from competitors to adopt cloud computing.
CP3 Some of our competitors have already started using cloud computing.
RS1 There is legal protection in the use of cloud computing
RS2 The laws and regulations that exist nowadays are sufcient to protect the use of cloud computing.
CCA1 At what stage of cloud computing adoption is your organization currently engaged? Not
considering; Currently evaluating (e.g., in a pilot study); Have evaluated, but do not plan to adopt this
technology; Have evaluated and plan to adopt this technology; Have already adopted services,
infrastructure or platforms of cloud computing.
CCA2 If youre anticipating that your company will adopt cloud computing in the future. How do you
think it will happen? Not considering; More than 5 years; Between 2 and 5 years; Between 1 and 2 years;
Less that 1year; Have already adopted services, infrastructure or platforms of Cloud Computing.
[123,66,115]
Cost savings
Relative advantage
Complexity
Compatibility
Technology readiness
Top management
support
Firm size
Competitive pressure
Regulatory support
Cloud computing
adoption
Note: All items are based on 5-point scale except those noted otherwise.
[102,94]
[48,39,79]
[49,102,79]
[123,49,102]
[48,83]
[24,4,125]
[123,24,88]
[48,83,84]
[121,4]
[102]
508
Full sample
Loading
SC1
SC2
SC3
CS1
CS2
CS3
RA1
RA2
RA3
RA4
RA5
CX1
CX2
CX3
CX4
C1
C2
C3
C4
C5
TR1
TR2
TR3
TMS1
TMS2
TMS3
FS1
FS2
CP1
CP2
CP3
RS1
RS2
CCA1
CCA2
0.95
0.93
0.96
0.87
0.86
0.80
0.89
0.90
0.88
0.82
0.89
0.73
0.83
0.92
0.89
0.79
0.90
0.88
0.84
0.68
0.71
0.74
0.86
0.92
0.74
0.90
0.93
0.85
0.83
0.85
0.86
0.97
0.90
0.96
0.96
Manufacturing
Services
T-statistic
Loading
T-Statistic
Loading
T-Statistic
68.54
58.14
144.21
49.70
38.01
23.75
65.65
61.18
52.24
34.79
55.66
10.32
20.46
58.55
45.99
24.90
73.59
53.02
29.83
15.14
16.50
17.98
39.28
89.35
17.77
71.93
53.70
25.28
29.37
30.75
39.59
13.75
8.98
173.34
166.69
0.96
0.96
0.98
0.89
0.86
0.84
0.90
0.90
0.90
0.83
0.91
0.77
0.86
0.94
0.89
0.83
0.92
0.89
0.87
0.65
0.71
0.81
0.86
0.93
0.70
0.89
0.91
0.91
0.81
0.80
0.88
0.95
0.96
0.94
0.94
32.74
24.06
21.93
42.28
26.10
14.50
45.54
36.34
41.19
24.76
54.23
4.91
8.99
10.82
9.23
16.35
44.95
32.71
33.09
6.91
10.06
16.65
24.01
49.00
8.14
28.01
28.39
28.21
7.87
5.73
12.08
10.56
13.75
66.37
79.21
0.94
0.91
0.95
0.86
0.85
0.77
0.88
0.90
0.86
0.81
0.88
0.67
0.79
0.91
0.89
0.77
0.88
0.88
0.81
0.69
0.67
0.65
0.86
0.92
0.76
0.91
0.95
0.82
0.83
0.87
0.86
0.98
0.86
0.97
0.96
27.39
17.29
35.61
30.31
26.29
20.10
46.48
46.71
40.25
25.56
36.99
4.63
8.63
19.54
21.49
17.90
51.35
39.94
19.59
12.81
10.19
7.96
25.11
68.85
15.93
63.96
40.50
12.67
24.52
32.68
32.90
6.80
4.41
191.26
158.60
Note: All items are based on 5-point scale except those noted otherwise.
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