Determinants of SMEs' Transformation Toward Cloud Services: Perspectives of Economic and Social Rationalities

Abstract

Cloud services represent a new paradigm that changes how organizations obtain advanced information technology capability. Cloud services have especially important implications for small and medium enterprises (SMEs). However, not all SMEs choose to transform toward cloud-based solutions. Accounting for both technical-economic rationality and trust-based rationality, we explore the determinants of cloud service transformation in the SME context. We conduct a survey involving 107 SMEs operating in China to examine the research model. The findings illustrate that 1) both trust and benefit have significant influences on SMEs’ transformation toward cloud services; 2) information security and social influence have positive influences, whereas vendor scarcity has a negative influence on SMEs’ trust in cloud services; and 3) uncertainty of service demands and information asymmetry between service clients and vendors significantly affect SMEs’ perception of cloud service benefits. The theoretical and practical implications and limitations are discussed.