Adoption of cloud computing by Malaysian small and medium enterprises

Abstract

Cloud computing is recognized as an emerging paradigm in today’s business environment. However, the literature presented a gap in knowledge regarding the innovation of cloud computing and the adoption of small enterprises for their economic sustainability. Nevertheless, it is not completely new technology as it is widespread due to the fast development of the internet, mobile phones, higher bandwidth, and increasing mobility requirements of the clients. In spite of the fact that the adoption of cloud computing services is proliferating in large companies, SMEs are still reluctant to employ cloud computing services due to the lack of knowledge and a clear guideline in this area. This study intends to address the SMEs’ problem of adopting cloud computing technology and highlight the considerable potential of cloud computing for SMEs in today's competitive market. In this regard, various dimensions of this technology are emphasized and the serious challenges that are hindering the adoption of cloud computing in SMEs are highlighted in this research. The purpose of this study is to develop a model to understand the relationship among technology, organizational, and environmental (TOE) contexts, intention to adopt cloud computing (IACC), and actual usage of cloud computing (AUCC) in SMEs in Malaysia as a developing country. More specifically, this research seeks to explore the mediation effect of IACC on the relationship between TOE context and AUCC. A positivist research paradigm was selected for this research. Drawing largely upon the extended TOE framework, this study utilized survey data from 203 Malaysian SMEs. Structural equation modeling (SEM) based on partial least squares (PLS) was used to assess the structural relations of the research model. The results of the structural model showed that data security, technology readiness, cost saving, top management support, competitive pressure were the most significant factors in predicting the adoption of cloud computing in Malaysian SMEs. Further, the results indicated that intention to adopt cloud computing can play a mediating role between TOE factors and the actual usage of cloud computing. Regarding the current state of cloud computing adoption in Malaysian SMEs, 55.67 percent stated to continue using cloud computing and 51.72 percent intend to use cloud computing.