Analysis of the Determinants of Software‐as‐a‐Service Adoption in Small Businesses: Risks, Benefits, and Organizational and Environmental Factors

Abstract

Cloud computing is a cutting‐edge information technology (IT) that receives computing resources and services from external providers rather than building their own information systems. Software‐as‐a‐Service (SaaS), one of the cloud computing models, has a built‐in best business practice and thus can be useful not only in reinforcing the IT capability of small businesses but also in improving business processes at the same time. The study investigated factors that affect the intention of small companies in Korea to adopt SaaS. The results were that (1) they were more concerned with the security risks than the economic or performance risks, (2) they were trying to improve the business process rather than quality improvement or cost, (3) management support was considered to be more important than the resources or IT capacity for the adoption of SaaS, and (4) they also considered the support of the vendor more important than the support of the government. The result of the study will provide practical strategies for not only small companies considering the adoption of SaaS and vendors supplying SaaS, but also government when setting up policies.