Why do firms adopt cloud computing? A comparative analysis based on South and North Europe firm data

Abstract

In this paper we empirically investigate and compare to what extent Northern and Southern European firms view cloud computing (CC) as a means of: (a) ICT investment reduction; (b) supporting and facilitating product/service innovation and process innovation; (c) experimenting with and exploiting new ICT; and (d) supporting and facilitating electronic innovation collaboration. This is done by estimating econometrically a model of CC adoption propensity containing measures of the four main adoption motives mentioned above besides further variables that are associated with technology adoption and a series of controls for firm size, sector and country affiliation. Our study is based on a dataset collected through the e-Business W@tch Survey of the European Commission from 556 European firms from the glass, ceramic and cement sectors. These findings indicate that Southern European firms are mainly oriented towards ‘first-level’ cost (and especially investment) reduction related benefits from CC as well as from new emerging ICT, while on the contrary Northern European firms are mainly oriented towards ‘second-level’ transformation related benefits from CC, which are associated with support and facilitation of innovation and external collaboration.