A Business Analysis of Cloud Computing: Data Security and Contract Lock-In Issues

Abstract

The widespread adoption of cloud computing services has a wide range of sourcing issues that companies must take into consideration when they standardize and automate their IT service delivery. In this respect, our paper identifies risks and opportunities of cloud computing which affect organisations' cloud adoption decisions. The research method used is based on a quantitative online survey questionnaire of 114 UK business respondents including IT professionals, managers, and decision-makers. The study results show that despite the business benefits for moving IT service consumption and delivery from on-premise to the cloud environment, the following risks are exacerbated: security, data privacy and contract lock-in. The outcome of the survey suggests that related concerns can be strategically mitigated. This can be done by negotiating cloud contracts to be more closely aligned to address business specific security and lock-in risks in cloud-based sourcing. Based on the outcome, the paper provides guidance to support the decision-making process on investment into cloud computing implementation to meet the organisations' business objectives with related concerns.