Determinant Factors of Cloud-Sourcing Decisions: Reflecting on the IT Outsourcing Literature in the Era of Cloud Computing

Stephan Schneider,Ali Sunyaev

doi:10.1057/jit.2014.25

Abstract

Cloud computing (CC) is an emerging form of IT outsourcing (ITO) that requires organizations to adjust their sourcing processes. Although ITO researchers have established an extensive knowledge base on the determinant factors that drive sourcing decisions from various theoretical perspectives, the majority of research on cloud-sourcing decisions focuses on technological aspects. We reviewed the CC and ITO literature and systematically coded the determinant factors that influence sourcing decisions. We show that most determinant factors of sourcing decisions in the ITO context remain valid for the CC context. However, the findings for some factors (i.e., asset specificity, client firm IT capabilities, client firm size, institutional influences, and uncertainty) are inconclusive for the CC and ITO contexts. We discuss how the peculiarities of CC can explain these inconclusive findings. Our results indicate that CC researchers should draw from research on ITO decision making but re-examine ITO concepts in the light of the peculiarities of CC, such as the differences between software and infrastructure services, the self-service procurement of cloud services, or the evolving role of IT departments. By summarizing determinant factors of cloud-sourcing decisions for consideration in future research, we contribute to the development of endogenous theories in the IS domain.

Highlights

Cloud computing (CC) changes how organizations manage their IT landscape, challenges traditional IT governance approaches, and requires organizations to adjust their sourcing processes (Yanosky, 2008; Armbrust et al, 2010; Winkler and Brown, 2013; Ragowsky et al, 2014)
We show that most determinant factors of sourcing decisions in the IT outsourcing (ITO) context remain valid for the CC context
Findings on the direct influence of mimetic pressures on cloud-sourcing decisions are scarce in the CC context, we argue that mimetic influences should be considered in further research as a determinant factor of cloudsourcing decisions, with respect to other factors from social or organizational theories, as research has shown that these relationships are strong and significant in the CC context (Benlian et al, 2009; Saya et al, 2010; Wu et al, 2011)

Summary

Introduction

Cloud computing (CC) changes how organizations manage their IT landscape, challenges traditional IT governance approaches, and requires organizations to adjust their sourcing processes (Yanosky, 2008; Armbrust et al, 2010; Winkler and Brown, 2013; Ragowsky et al, 2014). With CC, organizations can gain on-demand network access to a shared pool of managed and scalable IT resources, such as servers, storage, and applications (Mell and Grance, 2011). CC is an evolution and specific form of IT outsourcing (ITO); the extensive body of research on ITO provides a valuable basis for investigating cloud-sourcing decisions. Cloud computing CC provides on-demand network access to a shared pool of managed and scalable IT resources on a pay-per-use basis (Mell and Grance, 2011). The five key characteristics are the provision of (i) on-demand self-service access to (ii) virtualized, shared, and managed IT resources that are (iii) scalable on-demand, (iv) available over a network, and (v) priced on a pay-per-use basis

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