Strategic signaling through cloud service certifications: Comparing the relative importance of certifications’ assurances to companies and consumers

Abstract

Cloud service certifications (CSCs) are assessed by practitioners to support strategic cloud adoption decisions with the aim to reduce information asymmetries. Both businesses and consumers scrutinize CSCs’ assurances as ex ante signals indicating a cloud provider’s future service quality. While some research has examined the aggregate effects of certifications on decision variables, recipients’ evaluations of certifications and their assurances before making IT-related decisions have received little attention. Furthermore, prior research has predominantly focused on privacy and security assurances in e-commerce certifications. Drawing on signaling theory, we propose that certifications are signals that recipients decompose into a set of fine-grained assurance signals that they weigh to evaluate certifications. We evaluate the responses of 113 company representatives and 317 consumers to a best-worst scaling survey to examine the relative importance these two groups attach to ten assurances from CSCs. Our results show that similar to other online contexts, security and privacy are important assurances, but additional assurances related to availability, the customer friendliness of contracts, and legal compliance are also demanded, particularly by companies. Privacy, security, and availability are most crucial to both companies and consumers, but their relative importance varies substantially between the two groups. Post-hoc subgroup analyses reveal significant differences in assurances’ relative importance for provider and user companies, adopter and non-adopter consumers as well as companies using different types of services and from different industries. Our findings indicate that recipients evaluate certifications as a bundle of signals with varying importance due to recipients’ characteristics and context. With this conceptualization, we contribute to an advanced understanding of the sense-making of certifications and lay out how it influences cloud service adoption theories. Our study has practical implications for certification authorities that design CSCs as well as for providing insights to cloud service providers on customers who draw on CSC assurances when making cloud service adoption decisions.