Technical Support, Knowledge Transfer, and Service Demand: Evidence from the Cloud

Abstract

Does a provider’s technology support strategy influence its buyers’ post-adoption IT service use? We study this question in the context of cloud infrastructure services. The provider offers two levels of support, basic and full. Under basic support, the provider handles simple service quality issues. Under full support, the provider also offers education, training, and personalized guidance through two-way interactions with buyers. Using unique data on public cloud infrastructure services use by 22,179 firms from March 2009 to August 2012 and fixed effects dynamic panel data models, we find that buyers who opt for full support use 34.38% more of the service as well as increase the fraction of servers they run in parallel by 3.56 percentage points relative to those who do not. Furthermore, buyers who opt to switch back to basic support from full support continue using 15.58% more of the service and have a proportion of servers running in parallel 4.36 percentage points higher compared to buyers who have never accessed full support. We also find that in the long-run these effects of support on volume and efficiency of usage do not disappear. These findings provide suggestive evidence of buyer learning as a result of provider support.