The Differential Benefits of Cloud Computing for Small and Medium Versus Large Firms

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Book Section

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Publication Title

Information Systems Outsourcing: The Era of Digital Transformation, 5th Edition



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Cloud computing is a fundamental shift in the way computing power is acquired and consumed. It is a special case of IS outsourcing where some IT-related tasks and resources are outsourced to cloud vendors. Cloud computing confers unique capabilities such as heterogeneity, scalability, accessibility, availability, consumption based pricing, fully managed and standardized services on the adopting organizations. These capabilities in-turn result in several strategic and operational benefits to the adopting organizations. However, these capabilities are not leveraged by all adopting firms uniformly. Firms utilize these capabilities based on their orientation towards exploration and exploitation. While SMEs are more aligned towards exploratory activities, large enterprises are inclined towards exploitation. Therefore, we posit that the SMEs and large enterprises accrue differential benefits from cloud adoption such that SMEs leverage cloud to attain strategic benefits and large enterprises seek operational benefits from cloud adoption. Through a survey based exploratory study we found that there is a systematic difference between SMEs and large enterprises in the way they leverage cloud capabilities. Based on the results, we deduce that managers of SMEs believe that they can use cloud computing for exploration and on the contrary, managers of large enterprises believe that they can use cloud computing for exploitation.


Cloud computing; Cloud adoption; Strategic benefits; Operational benefits; Exploration; Exploitation


Business | Management Information Systems



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