Technical Support and IT Capacity Demand: Evidence from the Cloud

Using a unique data set on public cloud infrastructure services consumption by 15,076 firms over the period from March 2009 to October 2011, we address the question of how a provider’s technical support influences cloud demand. The provider’s customers can choose (and switch between) two levels of support, basic and managed, which differ in the extent to which the provider helps customers adapt the cloud infrastructure to their specific business needs. We find that customers who access managed support consume, on average, 110% more IT capacity than those who only access basic support. The former are also 15.5 percentage points more likely to deploy more complex infrastructure architectures that make better use of the cloud’s features (e.g., its scalability). Customers who switch from managed to basic support continue consuming an average of 90% more IT capacity than customers who only access basic support.