LUẬN văn THẠC sĩ (KINH tế) adoption of cloud computing by SMEs in emerging markets (brazil)

MASTER IN BUSINESS ADMINISTRATION – PROJECT MANAGEMENTDISSERTATION ADOPTION OF CLOUD COMPUTING BY SME’S IN A dissertation submitted in partial fulfillment of the requirements of Dublin

MASTER IN BUSINESS ADMINISTRATION – PROJECT MANAGEMENT

DISSERTATION

ADOPTION OF CLOUD COMPUTING BY SME’S IN

A dissertation submitted in partial fulfillment of the requirements of Dublin Business

School for the degree of M.B.A in Project Management

Frederico Brimbela (Student number 1706797)

Thesis Advisor: Dr Brid Lane

August 2013

I Frederico Brimbela declare that all the work in this dissertation is entirely my own unless the words have been placed in inverted commas and referenced with the original source Furthermore, texts cited are referenced as such, and placed in the reference section A full reference section is included within this thesis

No part of this work has been previously submitted for assessment, in any form, either at Dublin Business School or any other institution

16th of August 2013

To my family in special to my wife:

Your willing sacrifice, boundless support, and unending love that made this

journey possible.

For that, I am forever grateful!

Cloud Computing is an exciting topic, which is providing a paradigm shif from

computation as a product to computation as a service It is a phenomenon where various types of IT capabilities are centralized into data centers to ensure that such resources are available wherever and whenever they are needed and instead of purchasing costly

hardware and sofware which requires installation, maintenance and configuration, Cloud

Computing provides the usage of Cloud application and infrastructures based on pay per

usage scheme

To better understand the organizational application of Cloud Computing this research aims both to investigate economic payoffs from Cloud Computing investment and explores Cloud Computing adoption within the firm More specifically, the influential factors that impact adoption of Cloud-based technologies by Small and Medium

Enterprises in Emerging Markets, in particular Brazil Opportunities and challenges in the

area of Cloud Computing adoption and its impact in the growing economies are also

discussed

Brazil is South America's most influential country and an economic giant Brazilian SMEs and Entrepreneurs do not have mass computation to run their applications and to meet

the changing requirements Thus, Cloud Computing is growing by offering advanced IT

applications to meet the rapid changing environment

This dissertation is based on the study and evaluation of SMEs using Salesforce.com services and its adoption framework in Brazil For this study 170 Salesforce.com users

from different SMEs organizations, were surveyed, a number of quantitative measurements were performed to provide a better understanding of some of the adoption aspects The main conclusion from this study shows for a better adoption companies should use these solutions as part of a strategic effort for the organization The proposed study can make contributions for IS adoption literature and emphasis aspects

for a successful adoption of Cloud Computing solutions.

Key

words: Adoption; Cloud Computing; Emergent Markets; Brazil; Salesforce.com;

JEL

Classification System: M15- IT Management; M10-General; M31-Marketing;

Word Count: 18.492 Dissertation + 1.609 Self Reflection

TABLE OF CONTENTS

1 Introduction 1

1.1 Context 2

1.1.1 Industry Context 2

1.1.2 Emerging Markets Context (focus Brazil) 4

1.2 Purpose 6

1.3 Target & Contribution 7

1.4 Motivation for this Research 8

1.5 Research Question 9

1.6 Brief Outline of dissertation 10

2 Literature Review 12

2.1 Cloud Computing 12

2.1.1 Characteristics and Technology 13

2.1.2 Cloud Computing Service Models 15

2.1.3 Deployment models of Cloud Computing 16

2.1.4 Cloud Computing Advantage & Disadvantages 18

2.1.5 Challenges of Cloud Computing 19

2.1.6 Impact of Cloud Computing in Business 20

2.2 Small and Medium Enterprises 22

2.2.1 Characteristics of SMEs 23

2.2.2 Characteristics of SMEs in Emerging Markets 24

2.3 Adoption 25

2.3.1 Technology Adoption 25

2.3.2 SMEs Adoption of Technology 26

2.3.3. Factors to be Considered in Cloud Computing Adoption by SME 29

2.3.1. Cloud Computing for SMEs 30

2.4 Emerging Markets 31

2.4.1 Why Emergent Markets for this study 31

2.4.2 Brazil Cloud Computing overview 32

3 Research Methodology 35

3.1 Research Structure 35

3.2 Sample 38

3.3 Ethics 39

3.4 Limitations 39

4 Data Analysis and Findings 41

4.1 General Sample Demographics Characteristics 41

4.2 Hypotesis Analysis 44

4.2.1. Hypothesis 1 Analysis – Cloud Computing and its Technology 44

4.2.2. Hypothesis 2 Analysis – Cloud Computing in the Organization 54

4.2.3. Hypothesis 3 Analysis – Cloud Computing and the Environment 58

4.3 The findings 60

4.3.1 Fulfillment of purpose 60

5 Conclusions and Recommendations 61

5.1 Objectives achieved 61

5.2 Validation of the laid hypothesis 64

5.2.1. Validation Hypothesis 1 – Cloud Computing and its Technology 64

5.2.2. Validation Hypothesis 2 – Cloud Computing in the Organization 67

5.2.3. Validation Hypothesis 3 – Cloud Computing and the Environment 68

5.3 Summary - Contributions to the Body of Knowledge 69

5.4 Future Research 71

6 Self Reflection 72

6.1 Learning styles 72

6.2 Masters Experience 74

6.3 Influence of learning style on the research 74

6.4 Development skills 75

6.5 Going Forward 76

7 References 77

8 Appendices 82

8.1 Email Invitation to particiapte in the survey 82

8.2 Survey 83

8.3 Descriptive Survey Analysis 92

8.4 Hypothesis Testing 97

8.4.1. Appendix H1 Testing – Cloud Computing and its Technology 97

8.4.2. Appendix H2 Testing – Cloud Computing in the Organization 118

8.4.3. Appendix H3 Testing – Cloud Computing and the Environment 125

LIST OF FIGURES Figure 1 - Computing Cycle 2

Figure 2 - Social Media Revolution 3

Figure 3 - Map of Emerging Markets 4

Figure 4 - Brazil Population Density 6

Figure 5 - Conceptual Model Framework for the Research Topic 10

Figure 6 - Illustration of Cloud Computing Model 12

Figure 7 - Contributed technology fields to the advent of Cloud Computing 15

Figure 8 - Simple Cloud Computing Model - Basic Cloud Services 16

Figure 9 - Conceptual Model Framework on Cloud Adoption 26

Figure 10 - Company Segmentation by Size in Brazil 33

Figure 11 - Research Methodology Sequence Structure 35

Figure 12 - Cloud Computing Adoption framework 62

Figure 13 - Systems commissioning process 64

Figure 14 - Cloud Computing and its organizational changes 68

Figure 15 - Kolb's Learning Styles 72

LIST OF CHARTS Chart 1 - Cloud Computing Market Forecast 1

Chart 2 - World Wide Cloud Computing Market Value in B$ 4

Chart 3 - Brazilian GDP growth 2001-2012 5

Chart 4 - UE importance of SMEs in the different sectors 22

Chart 5 - SME importance on the breakdown of EU-27 value added 23

Chart 6 - Top 20 non-OECD countries of nominal GDP in 2010 31

Chart 7 - Location/Brazilian State 41

Chart 8 - Job Role 42

Chart 9 - Job Level 42

Chart 10 - Business Model 43

Chart 11 - Involvement with Salesforce.com 43

Chart 12 – Salesforce.com service rates 45

Chart 13 – Salesforce.com Overall Experience 47

Chart 14 - Choices to deploy the technology 48

Chart 15 - Advantages of the Technology in the business 49

Chart 16 - Estimated time to achieve Return of Investment 49

Chart 17 - Recommended Salesforce.com 51

Chart 18 - Salesforce.com service helped to achieve business goals 51

Chart 19 - Estimated Return of Investment with Salesforce.com 52

Chart 20 - Estimated time it took to achieve the ROI with Salesforce.com 53

Chart 21 - Intention to continue to use Salesforce.com 54

Chart 22 - Salesforce.com plan for the next 12 months 54

Chart 23 - Professionals in CRM and non CRM using and not using Salesforce.com 55

Chart 24 - Recommend Salesforce.com to others 58

Chart 25 - Performance of Salesforce.com sales team 58

LIST OF TABLES Figure 1 - Computing Cycle 2

Figure 2 - Social Media Revolution 3

Figure 3 - Map of Emerging Markets 4

Figure 4 - Brazil Population Density 6

Figure 5 - Conceptual Model Framework for the Research Topic 10

Figure 6 - Illustration of Cloud Computing Model 12

Figure 7 - Contributed technology fields to the advent of Cloud Computing 15

Figure 8 - Simple Cloud Computing Model - Basic Cloud Services 16

Figure 9 - Conceptual Model Framework on Cloud Adoption 26

Figure 10 - Company Segmentation by Size in Brazil 33

Figure 11 - Research Methodology Sequence Structure 35

Figure 12 - Cloud Computing Adoption framework 62

Figure 13 - Systems commissioning process 64

Figure 14 - Cloud Computing and its organizational changes 68

Figure 15 - Kolb's Learning Styles 72

This dissertation is the culmination of a two year MBA journey that could not have been accomplished without the support of many people I am glad to have the opportunity to acknowledge them here

First and foremost, I would like to express my deepest gratitude to my advisor, Dr Brid Lane, who has been a constant source of encouragement, wisdom and optimism

I would like to express my gratitude to Salesforce.com, for its financial sponsorship for

enrolling the MBA program

I would like to thank my management team at Salesforce.com, during the entire course

they encouraged, motivated, and accompanied me throughout my research: Arsenio Otero, VP Sales Development & Sales Strategy; Korstiaan Hardam, Senior Business Development Director; Charlie Weijer, SMB Sales Manager Southern Europe and to Sebastien Carre, Business Development Manager Southern Europe From overseas, I would like to highlight and express my gratitude to Wendy Close, Customer Research Director, who helped me with the data collection and to Pedro Martins, VP SMB Operations & Strategy for sharing his experience and for all the advices Last but not least,

I would like to express my gratitude to Christophe Bichaut, Senior Manager Technical Support, for all the support

I also would like to thank all the lecturers who participated in the delivery of the Dublin Business School MBA program

Without naming anyone in particular, gratitude goes out to my MBA colleagues for two years of highly beneficial shared values and experiences

ADOPTION OF CLOUD COMPUTING BY SMEs IN EMERGING MARKETS (Brazil)

1.

1 INTRODUCTION INTRODUCTION

Companies are deciding for Cloud solutions to reduce up-front costs and overall IT

spending, this way they are able to invest more in other initiatives such as Customer

Experience rather than Hardware or Sofware That’s the real advantage of the Cloud, it

lets businesses rethink where and how they set up their IT budget, and let them to focus more on what truly matters (Forbes, 2013)

The topic of my research is the adoption of Cloud Computing solutions by Small and Medium size Enterprises (SMEs) in Emerging Markets (focus on Brazil) Cloud Computing

isn’t a trend anymore it has become an important tool for many organizations (Vaquero,

et al., 2009) It helps organizations to outsource their IT, instead from having it in-house

A report from IDC suggests revenue of $26 billion from the Cloud Computing industry

during 2012 (IDC, 2009) Another avant-garde report from Gartner in 2012, anticipates

Cloud Computing as an influential technology with significant financial impact (Gatner,

2012) Their global forecast for Cloud services market’s revenue is to exceed $68.3 billion

in 2010 and reach $222.5 billion by 2015 (Gatner, 2012), Chart 1 bellow

Chart 1 - Cloud Computing Market Forecast

Source: Gartner, 2012

SMEs are known to be a critical element of the economy According to the Observatory of European SMEs, more than 90% of all European businesses consist of less than 10 employees (European Commission, 2005) SMEs are important to almost all economies, in the world, but especially for Emergent countries that are more willing to grow and adapt

to new technologies (Ocampo, 2005) The adoption of Cloud Computing solutions from

SMEs’ is well known, but what is less well understood is how they are adopting these solutions and what motivate them to continue using it

Brazil at the moment is a trend country Standard & Poor's, Moody's and Fitch, some of the worlds most important rating agencies, awarded Brazil with investment grade in 2008 Some of the reasons to focus this study in Brazil is because Brazil is also ranked the

also plays a leading role in Latin American economy and politics, standing out with increased attractiveness in the international scene, it is going to be the stage of the next world cup in 2014 and Olympic games in 2016 (Forbes, 2012)

1.1 CONTEXT

In this section it will be covered a briefly context about the Cloud Computing industry and

its evolution, the Emergent Markets in general and focus on Brazil context

1.1.1. I NDUSTRY C ONTEXT

The Information Technologies industry is very dynamic It's constantly changing, every single decade a very strong change happens, as we can see in Figure 1 bellow

Source: Salesforce com, 2011

Figure 1 - Computing Cycle

From the Mainframe Computing era in 1960 brought to us with IBM, with Thomas Watson

Jr 1970 to the Mini Computers era with Ken Olsen Later the Digital Era Computing on the

80’s The following decade, another change, into the Personal Computer era, with Bill Gates leading these years

In the 00’s we moved into a mobile era, led by Steve Jobs Now, in the 10’s we're entering into a new era, and this new era it's happening today, the one that is changing the way business and communication are done The model promises a shif from an organization required to invest heavily for limited IT resources that are internally managed, to a model

where the organization can buy or rent resources that are managed by a Cloud provider, and pay per use Cloud Computing also promises scalability of resources a

availability of resources (Erdogmus, 2009)

d on-demand

Another interesting fact is the number of users grew 10 times more (Figure 2) with each cycle (Howard, 2002)

Source: Salesforce com, 2011

Figure 2 - Social Media Revolution

The beginning of Cloud Computing has sparked an interest in different organizations,

institutions and users to take advantage of web applications This resulted in a new economic model for the Information Technology (Vaquero, et al., 2009) Business

applications are moving to the Cloud The shif from traditional sofware models to the

Internet has steadily gained momentum over the last 10 years Looking ahead, the next

decade of Cloud Computing predictions say that will continue to grow, in the Chart 2 Gartner predicts that in 2013 the worldwide market value of Cloud Computing is 140B$.