An examination of cloud computing adoption decisions: Rational choice or cognitive bias?

Abstract

The objective of this study is to challenge the prevalent assumption that rational choice is the sole driver behind decisions related to Software as a Service (SaaS) adoption, and to demonstrate the impact of status quo bias, manifested as inertia, on the hesitancy to adopt SaaS. To validate our premise, we compared the effects of rational choice and status quo bias on SaaS adoption decisions made by decision-makers in both adopting and non-adopting firms, expanding upon prior research that primarily focused on adopting organizations. By analyzing a dual set of 157 cloud-adopting and 24 non-adopting organizations, our results show that inertia affects the decisions of non-adopters but not previous adopters. Furthermore, we found that previous adopters are more likely to consider the benefits of cloud computing, while non-adopters are more influenced by loss aversion in their cloud adoption decisions. Counter to expectations however, is the finding that previous adopters did not consider the risks of cloud computing adoption. This study adds to the understanding of cloud computing adoption by highlighting the impact of status quo bias on decision-making and providing deeper insights into the complexities of the cloud adoption process.