The Extant Literature on Cloud Computing Decision-making and Implementation Processes

The first definition of cloud computing can be found in the document ‘Definition of Cloud Computing’, which was published by the US National Institute of Information Technology (NIST) [10]. It refers to this technology as ‘a network model that allows access to a set of shared information across computing resources (e.g. servers, storage, applications, services) that can be rapidly provided by a provider’ [1]. This report also identifies its characteristics, distribution models and architecture, shedding light on the high degree of flexibility, elasticity and cost savings that result from adopting this technology. This view of cloud computing is widely accepted by many authors [8, 14, 15, 19-22]. Indeed, extant literature agrees upon describing cloud computing as a set of technologies that enable, store and process data using hardware and/or software that is distributed and made available virtually on the Internet [23]. Qualified suppliers provide these services to users through a set of technologies and information resources that are available online [24].

The literature on this topic is still limited, and few papers have been published recently. According to Yang and Tate [25], the studies on this topic can be divided into four areas: technology (regarding performance, network, data management), business economics (cost-benefit analysis, market analysis, risks, legal issues), applications (engineering studies) and general studies (non-empirical studies regarding introduction and implementation).

Primitive studies on cloud computing are strictly theoretical. Many authors provided their own definition of cloud computing and highlighted the enormous benefits that this tool could provide to businesses, supporting its adoption [8, 14,15, 19-22, 26]. The following table compares the definitions of cloud computing found in the literature (Table 1).

According to some authors [19, 20], cloud computing is not a new technology, but instead it is a new use of virtualisation and grid computing. Vouk [22], Plummer et al. [8] and Vaquero et al. [23] do not accept this definition; instead, they define

Table 1 A comparison between different definitions of cloud computing



‘Cloud is a pool of virtualised computer resources’.

Boss, Malladi, Quan, Legregni and Hall [20]

‘Cloud computing is not a fundamentally new paradigm. It draws on existing technologies and approaches, such as utility computing, software-as-a-service, distributed computing, and centralized data centers. What is new is that cloud computing combines and integrates these approaches’.

Weiss [21]

‘A type of parallel and distributed system consisting of a collection of interconnected and virtualized computers that are dynamically provisioned and presented as one or more unified computing resources based on service level agreements established through negotiation between the service provider and consumers’.

Buyya [14]

‘Cloud computing embraces cyber-infrastructure and builds on virtualization, distributed computing, grid computing, utility computing, networking, and Web and software services’.

Vouk [22]

‘A style of computing where massively scalable IT-related capabilities are provided as a service across the Internet to multiple external customers’.

Plummer, Smith, Bittman, Cearley, Cappuccio and Scott [8]

‘A large pool of easily usable and accessible virtualized resources (such as hardware, development platforms and/or services). These resources can be dynamically reconfigured to adjust to a variable load (scale), allowing also for an optimum resource utilization. This pool of resources is typically exploited by a pay-per-use model in which guarantees are offered by the infrastructure provider by means of customized SLAs’.

Vaquero, Rodero-Merino, Caceres and Lindner (2009) [23]

‘ A model for enabling convenient, on-demand network access to a shared pool of configurable computing resources (e.g. networks, servers, storage, applications, and services) that can be rapidly provisioned and released with minimal management effort or service provider interaction’.

Mell and Grance [10]

‘The illusion of infinite computing resources available on demand, the elimination of up-front commitments by cloud users, and the ability to pay for use of computing resources on a short-term basis as needed’.

Armbrust, Fox, Griffith, Joseph, Katz and Konwinski [15]

cloud computing as a new technology. The NIST argue that the difference between cloud computing and other existing technologies is not merely linked to the attribute of virtualisation, but it is primarily about customisation and the possibility of getting ‘on-demand’ service. Thus, the main difference between cloud computing and other existing technologies is related to its different business model [10]. All of the aforementioned studies provide a theoretical vision of the benefits, costs and risks associated with this tool. Following the increasing level of adoption of the instrument has allowed other authors to empirically demonstrate the benefits, limitations and problems arising from the adoption of cloud computing in enterprises. In 2009, Rosenthal et al. [27] provided a practical approach for cloud computing implementation by empirically analysing the benefits generated by this technology for the ‘biomedical informatics (BMI) community’. In the same period, Velte et al. [28] provided a detailed guide to SMEs’ and large firms’ migration to the cloud computing system using the case study method. This study highlighted firms’ motivations for adopting cloud computing and the difficulties they encountered with its implementation. Hosseini et al. [29] conducted a similar study that analysed the risks and rewards of migration to a cloud-based system by interviewing the end users of a firm in the energy sector. The results showed that cloud computing is potentially able to reduce firms’ operating costs. More specifically, they found a reduction of 37 % in ICT costs and a reduction of 21 % of maintenance actions. However, the study also highlighted some significant drawbacks, such as loss of customer confidence, loss of control of data, employees’ resistance to changing their routines and transfer costs. Sultan [16] conducted a study based on the application of cloud computing in businesses. More specifically, the author identified the organisational and economic benefits generated by the introduction of this tool in an English medium-sized enterprise in the computer industry. The author pointed out that after cloud computing introduction, the costs of the ICT function were reduced by approximately 80 % (it is important to highlight that the employees were reallocated and the previous ICT structure was sold). This study stresses that this instrument is not suitable for all SMEs because the convenience of its usage depends on the size of the ICT structure, the costs the structure has already incurred (and that cannot be eliminated), the security costs and the degree of risk that the firm’s management is willing to accept. Based on these studies, other authors have verified the benefits and disadvantages of adopting cloud computing in SMEs [30-35], emerging markets [36, 37], banks [31, 38], the public sector [39-41], the health-care sector [27, 36, 42, 43] and other relevant sectors [35, 44, 45].

In all of the cited cases, cloud computing is regarded as an important solution to corporate networks’ problems. That being said, this tool has important drawbacks. Indeed, while providing a number of benefits not achievable with other technologies, it also creates a number of risks that are ‘typical’ of the outsourcing of ICT function. Therefore, it is necessary to find a proper method of implementation that balances the disadvantages and advantages to determine when the cloud may be an optimal answer to a firm’s needs [16, 46].

However, cloud computing has many weaknesses that must be considered before its adoption, many of which have been covered in the literature. For example, the introduction of cloud computing in business contexts requires redesigning and adapting internal control systems due to the existence of potential dangers, especially those related to the loss of data control within the cloud. In a recent document, the NIST argued that cloud computing, as with any emerging technology, is inappropriate for the majority of firms due to ‘open issues’ [1]. According to several authors (i.e. [47, 48], there are five open issues that present challenges to the efficient implementation of cloud computing. The first is computing performance, as different applications within the cloud may require different levels of performance, which in turn requires increasing costs or decreasing system efficiency. Of course, this issue is not exclusively a cloud computing problem [13, 49, 50]. The second issue is cloud reliability, which relates to the alignment of various factors, such as the hardware and software offered by a provider to employees within firms. A cloud solution depends on many factors in terms of the degree of reliability within an environment [13, 51-54]. Third, economic goals can face challenges due to the openness of cloud computing. While cloud computing offers the opportunity to outsource the ICT function, which can come with economic benefits, it also has many disadvantages. The fourth open issue relates to compliance. Many authors have stated that cloud computing providers are in the best position to enforce compliance rules; this can increase disadvantages for end users [26, 49, 54]. The final issue with cloud computing openness highlighted in the literature relates to information security. Moving data into the cloud means potentially losing control of it, which could create many problems in terms of data security and privacy [13, 15, 49, 51-53, 55-57]. Leaving aside the issues of control and the disadvantages related to the adoption of the instrument, as they are beyond the scope of this work, more in-depth study of what motivates firms to migrate to cloud technology is still required. Specifically, it is important to define advantages as the benefits that a firm should expect to achieve.

The literature identifies five major benefits of cloud computing adoption: reduced costs, increased storage, high automation, flexibility, greater mobility and less focus on ICT function. The most immediate for users is certainly cost reduction. Customers pay for a cloud service that is completely customisable and modelled on the firm’s real needs. Thus, it is not yet necessary to support large investments in infrastructure. Related to this, there is another advantage resulting from the adoption of this tool: increased storage. The firm can benefit from external memory that is always available to store its data. Another benefit is high automation. Firms that adopt this tool do not require employees in data centres for data backup and control because these tasks are delegated to the provider. This allows firms to become more flexible. The cloud is customisable depending on the changing needs of the customer. The possibility of changing at every moment, and to obtain economies of scale, is the basis of the competitiveness of the cloud. Accessibility from any location provides greater mobility—customers can access their data at any time and from any location, facilitating multinational firms [14, 15].

The literature identifies a number of disadvantages or problems that may arise following the implementation of cloud computing. Specifically, a disadvantage is defined as the charge (not necessarily financial) that the firm has to bear to use a certain technology. The disadvantages discussed in the literature relate to reliability [13, 51-53], economic objectives [13-15, 58], low level of compliance [26, 49, 57] and difficulties of adaptation, performance and data security [13, 15, 49, 51-53, 55, 57]. Below, the reasons for some authors’ misgivings about the use of such technology are given.

The first misgiving regards reliability. Several authors [13, 51-53] highlighted problems related to the capacity of the facilities offered by the provider to ensure stable performance over time.

As regards the economic objectives, the literature is clear that, despite that cloud computing offers the opportunity to outsource ICT, there are numerous disadvantages that must be mitigated, which requires incurring additional costs and reducing the convenience of this tool [13-15, 58, 59]. Another point discussed by several authors concerns the degree of compliance. Indeed, the provider is in a good position to enforce the rules of conformity, and this is a limitation for the firm (or at least it makes the control less effective) [26, 49, 57].

A further critical issue identified by several authors is the level of performance. The performance of a cloud network does not depend only on the model chosen, but also on the state of the network and the software that is used. Often, the use of applications other than those supplied by the provider may cause compatibility issues, lowering performance. However, this kind of problem is common to many technological solutions [13, 49, 50]. One of the most discussed topics is data security. Moving data within the cloud can create problems in terms of the firm’s security and privacy [13, 49, 51-53, 55-57].

Despite these disadvantages, several authors stated that cloud computing is a technology that is potentially able to provide a competitive advantage to businesses when it is properly adopted and implemented [49, 51-53]. In the light of this literature, in a context in which the technology is revealed as the most appropriate instrument to ensure the flexibility, efficiency and effectiveness to the ICT function, it appears necessary to examine the reasons that cause firms to adopt (or not adopt) cloud computing.

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