LUẬN văn THẠC sĩ (KINH tế) factors that lead to successful cloud computing adoption in irish small and medium sized enterprises

May, 2013 Totalwordsexcludingquotes,bibliographyandappendices:19967... Figure 12 Findings Reference Matrix...67... I would like to thank those individuals who thattooktimeaway fromthe pr

FactorsthatleadtoSuccessfulCloudCo mputingAdoptioninIrishSmallandMe

Douglas Black

Student Number: 1717113

ThisDissertationispresentedinpartialfulfilmentoftherequirementfortheMasterofB u s i n e s sAdministrationinCloudComputingatDublinBusinessSchoolinconjunctionwithLiverpool Joh

nMoore’sUniversity

May, 2013

Totalwordsexcludingquotes,bibliographyandappendices:19967

TableofContents

Table of Contents 1

Table of Figures 3

Acknowledgements 5

Abstract 6

Chapter1:Introduction 7

1.1 Background 7

1.2 ResearchObjectives 10

1.3 ResearchQuestion 11

1.4 Scope andlimitationsof the research 11

1.5 Theorganisationofthedissertation 12

1.6 Contributions of the research 13

Chapter 2:LiteratureReview 15

2.2 Introduction 15

2.3 SmallMediumEnterprises 16

2.3.1 Introduction 16

2.3.2 Identifying the SME 17

2.3.3 SMEs in Ireland 18

2.3.4 CompetitiveAdvantage 21

2.4 Cloud Computing 22

2.4.1 Introduction 22

2.4.2 Inflection Point 23

2.4.3 ExplainingtheCloud 24

2.4.4 Strategic Choices 27

2.4.5 Irish Perspective 29

2.5 TechnologyAdoption 32

2.5.1 Introduction 32

2.5.2 LifecycleChoices 33

2.5.3 ValueProposition 36

2.5.4 Frameworks 38

2.5.5 Vendor Support 41

Chapter 3:ResearchMethodology and Methods 44

3.1 Introduction 44

3.2 Research Methodology 45

3.3 Research Philosophy 46

3.4 ResearchApproach 47

3.5 Research Strategy 48

3.6 Research Choice 50

3.7 TimeHorizons 51

3.8 Sampling 52

3.9 Data Collection 56

3.10 Data Analysis 58

3.11 Reliability and Validity 60

3.12 Ethics 62

Chapter 4:Findings 64

4.1 Introduction 64

4.2 Data Collection 64

4.3 Data Analysis 65

4.4 Findings 67

4.4.1 Organisational Maturity 67

4.4.2 DecisionFrameworks 69

4.4.3 Vendor Relationships 69

4.4.4 TechnologyEffect 70

4.4.5 EnvironmentalSupport 71

4.4.6 Ireland Effect 72

4.4.7 SME Focus 73

4.4.8 Strategic Viewpoint 75

4.4.9 LifecycleAlignment 76

4.4.10 Clear Benefit 76

4.4.11 CommercialOpportunities 77

Chapter5:Discussion 79

5.1 Introduction 79

5.2 Irish SMEAdvantage 79

5.3 Understanding Value 80

5.4 GovernmentSupport 82

5.5 Strategic Choice 83

5.6 Organisational Approach 84

5.7 IndustryInfluence 85

Chapter 6:Conclusions 87

6.1 Introduction 87

6.2 Irish Advantage 87

6.3 Understanding Value 88

6.4 Strategic Choice 88

6.5 Organisational Approach 89

6.6 IndustryInfluence 89

Chapter 7:SelfReflection 91

7.1 Introduction 91

7.2 ManagementSkills 92

7.3 ResearchSkills 93

7.4 Conclusion 95

Bibliography 97

Appendix 104

Appendix1RespondentContact 104

Appendix 2 Interview Guide 105

Appendix 3 Interview Consent Form 108

Appendix 4 Findings Matrix 109

Appendix 5 PersonalSWOTAnalysis 113

TableofFigures Figure 1SMEsin Ireland: Fact Sheet (SBA, 2010) 18

Figure 2 ThinkSmallFirstPrinciples(EuropeanCommission,2008) 21

Figure 3 Hype Cycle for Cloud Computing (Gartner, 2012) 23

Figure 4 NIST CloudComputing(NSAI, 2012) 26

Figure 5ICTContribution toEmploymentand Value Added (Goodbody, 2011) 30

Figure 6 Technology Adoption Lifecycle (Rogers, 2003) 33

Figure 7 Four Strategicperspectives (Slacketal.,2010) 35

Figure 8 Thee Factors in SuccessfulCloud Adoption (Techaisle, 2012) 43

Figure9T h e ResearchOnion(Saunders,etal,2009) 46

Figure 10 Research Choices (Saunders,etal,2009) 50

Figure11SamplingSelection(Saundersetal.,2009) 52

Figure 12 Findings Reference Matrix 67

Iwouldliketoacknowledgeanumberofpeople whohavebeenpartofthewritingofthisdissertation

IwouldliketoexpressmygratitudetomysupervisorfromBridLanewhogavemeadvice a n d encouragementand above all a clearguidancethroughthedissertationprocess

I would like to thank those individuals who thattooktimeaway fromthe pressures of work tobeinterviewed

Andthankstoallof mye xt en de d familywhodirectlyor indirectlyhelpedmetocomple te t h

i s d i s s e r t a t i o n , e s p e c i a l l y A n n e a n d Mike,M i c h e l l e andofcourseEnya

Thanks to mymotherfor putting up withmeon my ‘sabbaticals’ away fromthe library

Finally,I woulda l s o l i k e t o t h a n k m y w i f e , A n g e l a f o r h e r encouragement,u n d e r s t a n d i n

g a n d f o r ‘ s h a r i n g ’ t h e dissertationprocess withme

ThepurposeofthisdissertationistoexplorethefactorsthatleadtosuccessfulcloudcomputingadoptionionIrishSMEs.Theliteraturesuggeststhatcloudcomputingisthelatestt e c h n o l o g y trendthatpromisesto redefine the delivery of technology in the hugelyimportant

Themodelofoperationalexpenditure,scalabilityandaglobalreach,thatisbeyondthereacho f mostSMEs,areseenasdisruptivebutenablingfeaturesofcloudcomputing.Theinternala n d externalcompetitiveforcesprevailingintheIrishmarketprovideasuitablebackdroptot h e r e s e a r c

h a n d t h e I r i s h governmenth a s manyi n i t i a t i v e s aimeda t j o b c r e a t i o n i n t h e technologyandSMEsectorsand developing exportmarkets

TheIrishSMEandtechnologysectorarecentralfocusforgovernmentinitiativesandsupport,andDublinistoutedastheCloudComputing capitaloftheworld.However,does theintentionsupporttherealitythatfacesIrishSMEsandcanthisbeafactorinthesuccessofadoptingcloudcomputing

ThefindingsgiveadifferentperspectiveandSMEsarefindingthatfactorsaffectingsuccessfulcloudcomputingadoptionareincontrasttotheliterature.Thisresearchconcludesby

identifying the factors that leadtothesuccessofcloudcomputing adoption by Irish SMEs

Smalla n d M e d i u m E n t e r p r i s e s (SME)i n Irelandrepresenta growthsector,andcontributeover

€10bnannuallytotheExchequer,makinganenormouscontributiontotheIrisheconomy( E n t e

r p r i s e NetworkE u r o p e , 2 0 1 0 ) C l o u d C o m p u t i n g s a l e s b y I r i s h firmsa r e

p r e d i c t e d tocontributeafurther€9.5bntotheIrisheconomyby2014andtheoverallt e c h n o l o g ysectorisvitaltoIrish economicrecovery(NewMorning IP,2012).IrelandwashometoalmostaquarterofamillionSMEsin2010,andemployingalmostamillionpeople

(EnterpriseE u r o p e N e t w o r k , 2 0 1 0 ) I n termsofeconomicvalueaddedtoIreland,SMEscontributeadisproportionateamountofvalue(56%)relativetotheirsize (SBA, 2010).

TheI r i s h governmenth a s u n d e r t a k e n a numbero f s t e p s t o f o s t e r SMEg r o w t h , w

i t h 1 5 di ff er en t initiatives( I S M E , 2 0 1 2 ) I n termso f a c c e s s t o f i n a n c e , theseinitiativesi n c l u d e r e s p o n s e s a t t h e f i s c a l – t a x incentives–

l e v e l , a s w e l l a s

equity,non-equityinvestmentfunding,andbank-

basedcreditschemes.Theseschemesareoverseenbycross-agencygovernmentgroups,withthemaininwardinvestmentfocusbeinghandledbytheIrishDevelopmentA g e n c y ( I D A ) a n d t h e smallbusinessa n d e x p o r t -

o r i e n t e d s u p p o r t s comingmainlyf r o m E n t e r p r i s e I r e l a n d I n addition,o n 9 J a

n u a r y 2 0 1 3 , t h e N a t i o n a l P e n s i o n s ReserveFundannouncedaseriesofnewfundingmeasuresfortheSMEsector,withasum of

€850millionb ei ng madeav ai la b le t o providee qu it y, credita nd restructuringa nd re co ve ry investmentfor Irishsmallandmedium-sizedbusinessesandmid-sizedcorporations

AtE U l e v e l , t h e E U SmallB u s i n e s s A c t 2 0 0 8 b r o u g h t i n a w i d e r a n g e o f p r o

-e n t -e r p r i s -e m-easur-esd-esign-edtomak-elif-e-easi-erfor smallfirmsthroughth-e‘SmallBusinessAct’forEurope(EuropeanCommission,2008).Thisact,oncetransposedtointolocallegislationsetoutmediumt e r m S M E p o l i c i e s a l i g n i n g w i t h t h e “ E u r o p e 2 0 2 0 ” s t r a t e g i c d

i r e c t i o n (European Commission,2 0 1 2 b ) T h e o v e r a l l themeo f t h e s e i n i t i a t i v e s i n c

l u d e s promotingt h e u p t a k e a n d e f f e c t i v e u s e o f Informationa n d C o m m u n i c a t i o n s

T e c h n o l o g i e s b y S M E s T h e s e measuresareintendedtostimulatecompetitivenessinthemarketandSMEsarebest p l a c e d totake advantage,beingmoreagilethanlargerenterprises

Theintroductionofnewtechnologiesrepresents bothrisksandopportunitiesforbusinesses.CloudComputingisatthepointo f becominga mainstreamw a y t o d e l i v e r informationt e

c h n o l o g y buthaspolarisedtheopinionofInformationTechnologyDecisionMakers( C

h o r a f a s , 2 0 1 1 ) O n o n e s i d e , i n n o v a t i v e o r g a n i s a t i o n s a n d i n d u s t r y a r e

p r o m o t i n g t h e

benefitsofbringingcloudcomputingintotheirorganisations,whilstontheothersideconcerns arebeingraisedaboutsecurityanddataprivacy(Babcock,2010).

Inthecurrentglobalfinancialcrisis,Ireland,despite beinginsomeeconomicturmoil,hasaboomingtechnologysector,makingitanidealcontextinwhichtostudythesuccessfuluseofc l o u d computing.In2012twonewcloudcomputingresearchfacilitieswerelaunched(EnterpriseIreland,2012b;DCU,2 0 1 2 ) I r e l a n d i s a n ideallocationforfirmse n g a g e d i n cloudcomputing,w i t h a w e

1.2 ResearchObjectives

The aim of this research is toinvestigatesuccessful cloud computing adoption by IrishSMEs.T h r o u g h investigatingtheprocessesofsuccessfulcloudcomputing adoption,theresearcherw i l l identifythe factorsthatledtothissuccess

Ther e s e a r c h e r ’ s interesti n t h e subjecta r e a i s primarilycareerenhancementa n d p e r s o n a ldevelopmentan dt he de si re tounderstandtheinter action b e t w e e n te ch no lo gy ad op t

1.3 ResearchQuestion

Ther e s e a r c h q u e s t i o n s a r e d e r i v e d f r o m t h e researcher’sp e r s o n a l i n t e r e s t a n dexperienceh a v i n g w o r k e d i n t h e S M E technologysectorf o r o v e r t w o d e c a d e s I r e l a n

d i s positioningi t s e l f tobecentraltothecloudcomputingindustrywithSMEscentraltoeconomicrecovery

Theresearchquestionsstemfromtheresearcher’sinterestinunderstandingiftheadoptionofc l o u dcomputingis,inpractice,informedbytheory

andresearchliterature,andtheresearcherh a s setthegoalsofthisresearchto answer the followingquestion:

What are the factors associated with success inadoptingcloudcomputing,andwhatlessonsc a n

b e l e a r n t f r o m that leadto successful cloudcomputingadoption bySMEsin Ireland?

1.4 Scopeandlimitationsoftheresearch

Maylora n d Blackmon( 2 0 0 5 , p 7 1 ) s u g g e s t t h a t t h e r e s e a r c h questiondefinestheareaofinvestigation andthescopeof theresearchproject.The scopeofthisprojectisconfinedt

oS M E s i n I r e l a n d t h a t h a v e s u c c e s s f u l l y adoptedcloudcomputing.Thisnarrowfocuswillallow theresearchertobuildanin-depthunderstandingofthesuccessfactorsandalsoofthewidertechnology industry in Ireland

SMEsw h o a r e consumeso f c l o u d s e r v i c e s s u c h a s emailo r o n l i n e s t o r a g e a r e o u t s i d e t

h e s c o p e ofthisresearch.TherationalebehindthisisbasedontheassumptionthatSME’swhohavebroughttheirbusinesstothecloudwillhaveamuchgreaterinterestthanthosethataresimply consumingacloudservice

ThelimitationsofthisresearchisthatitisrestrictedtoonlythoseSME’swhohaveadoptedcloudcomputingtodeliverthecoreproductorserviceoftheir business

Thelimitationsoftheresearchthattherespondentsareallusedcloudcomputingtechnologyt o deliverthecoreproductofserviceoftheirbusinessandthedatacollectedisonlyrelevanttothispartofthetotalpopulation.Theresearchfindingsfromtheselectedpopulationsamplecanb e g e n e r

a l i s e d o n l y t o thepopulationfromwhichthatsamplew a s t a k e n (Brymana n d Be ll , 2011),andthisisalimitationofthisresearch and not the chosen researchmethodology

Chapter3outlinesthechoiceofresearchmethodsandphilosophy,theselectionofasuitablesamplea n d t h e c h o i c e o f d a t a c o l l e c t i o n methods.I t j u s t i f i e s t h e c h o i c e o f a q u a

l i t a t i v e methodandtheuseofacasestudywithinterviewastheresearchinstrument.Italsodetailsth e s el ec ti on of d at a an al ys is te ch ni qu es a nd

Chapter5 discussest h e findingsi n relationt o t h e literaturer e v i e w a n d p r o v i d e s e x p l a n

a t i o n s i n t h e c o n t e x t o f t h e primaryand secondary research

e x t e n d e d t o t h e w i d e r Europeanandglobaleconomy.Ireland’scentralposition i n t h e t e c h n

o l o g y s e c t o r m a k e s r e s e a r c h i n t h i s a r e a p a r t i c u l a r l y r e l e v a n t a n d t h e relationshipsbetween understandingthefactorsleadingto successfuladoption,andsuccessitself,iscrucialforinformingfuturedecisions.Maxwell(2005,pp.45-

6)contendsthatanawarenessofalternative theses(otherthanliterature)isimportantasanideologicalc o u n t e r w e i g h t t o e x i s t i n g t e x t a n d t h e o r y T h i s r e s e a r c h e n d

e a v o u r s t o b e p a r t o f t h o s e alternativetheseswithinthistopic area

Thedevelopmento f a n e x p l a n a t o r y t h e o r y andt h e associationo f c e r t a i n f a c t o

r s t o t h e s u c c e s s ofadoptingcloud computing,fromthosewhohavegonethroughthisprocess,will contributenewunderstandingtothosewhoareresearchingorevaluatingt h e u s e o f

c l o u d computinginthefuture

Thelessonslearntfromthosewhohavegonethroughthisprocess,togetherwiththetheoreticalunderpinnings,willdeveloptheresearcher’sknowledgeandunderstandingofthisf i e l d Hadidi(2012,p.1)reportsthatmostpublicationsintheareaofCloudComputinghavefocusedonthetechnicalaspectsofthistechnology.ThecontributionofthisresearchfocusesontheadoptionprocesstofillagapinidentifiedbyVaezi,(2012,p.2):“todirectly

investigatecloudcomputingfromanacademicstandpoint”.Inconductingthisresearch,theresearcherwillalsocontributenewtheoryonthistopic.

2.2 Introduction

Theliteraturereviewconstitutesthesecondarydatasourceforthedissertationandidentifiest h

e mainthemesandtheoriesofthetopicsunderinvestigation.MaylorandBlackmon(2005,p 8 1 ) statethatthepurposeoftheliteraturereviewistobothsupporttheresearchtopicandtodefine t h e r e

s e a r c h q u e s t i o n Theliteraturereviewensuresthatt h e r e s e a r c h q u e s t i o n i s groundedintheexistingresearchandtherewillbecoherence betweentheliteraturereviewandt h e r e

s t o f t h e

dissertation(Andrews,2004,pp.17-18).However,d e f i n i n g t h e r e s e a r c h q u e s t i o n isaniterativeprocess,inthatwithoutthequestionstodrivetheliteraturereview,ther e v i e w i t s e l f c o u l d b e aimless

Hart(2005,p.3)givesanadditionalinsightandexplainsthatafurtherpurposeofsearchingt heliteratureistoidentifyworkthathasalreadybeendoneorinprogressthatisrelevantto this research,tohelpdesignthe methodologyandtoidentifykeyissuesanddatacollection an d analysistechniques.ThischapterpresentsthethemesandissuesthatarerelevanttotheemergenceofacriticalunderstandingofcloudcomputingadoptioninIrishSME’s.Itd e v e l o p s theconceptuallensesthatwillbeusedtoanalysethesubjectareas,theories,concepts andmodels;itisdividedintothreemainsections

ThefirstsectionexaminestheimportanceoftheSMEsectortoIreland,theinfluencesofthet e c h

n o l o g y environmentinwhichitoperates,andtheinitiativesandsupportsforSMEsfroma EuropeanandIrishcontext.ItidentifiestheimportantattributesofSME’sandexaminethec o n t r i b u t

i o n ofSME’stotheIrisheconomy.ItalsosummarisesgovernmentsupportforIrishSMEs

adopting technology for both inwardinvestmentand export growth