The Adoption of Cloud Computing by Indian SMEs – an Exploratory Study

Cloud computing adoption has experienced a considerable rate of growth since its emergence in 2006. By 2011, it had become the top technology priority for organizations worldwide and according to some leading industry reports the cloud computing market is estimated to reach $241 billion by 2020. Reasons for adoption are multi-fold, including for example the expected realisation of benefits pertaining to cost reduction, improved scalability, improved resource utilization, worker mobility and collaboration, and business continuity, among others. Research into cloud computing adoption has to date primarily focused on the larger, multinational enterprises. However, one key area where cloud computing is expected to hold considerable promise is for the Small and Medium Sized Enterprise (SME). SMEs are recognized as being inherently different from their large firm counterparts, not least from a resource constraint perspective and for this reason, cloud computing is reported to offer significant benefits for SMEs through, for example, facilitating a reduction in the financial burden associated with new technology adoption. This paper reports findings from a recent exploratory study into Cloud Computing adoption among Indian SMEs. Despite its purported importance, this study found that almost half of the respondents had not migrated any services or processes to the cloud environment. Further, with respect to those who had transitioned to the cloud, the data suggests that many of these SMEs did not rigorously assess their readiness for adopting cloud computing technology or did not adopt in-depth approaches for managing their engagement with cloud. While the study is of an exploratory nature, nevertheless the findings have important implications for the development/ improvement of national strategies or policies to support the successful adoption of Cloud Computing technology among the SME market. This research has implications for academic research in this area as well as proposing a number of practical recommendations to support the SME cloud adoption journey.