Cloud-Based Services on SME

Contents
Introduction..............................................................................................................................4

Small and Medium Enterprises..............................................................................................8

Cloud Computing...................................................................................................................10

Cloud based services in India in different industries..........................................................13

Cloud Computing in India....................................................................................................13

Deployment of Cloud Computing in India...........................................................................14

Cloud based awareness in Indian SMEs..............................................................................15

Use of Cloud Computing In Different Sectors.....................................................................20

BFS sector & cloud..............................................................................................................20

Hospital / health sector & cloud...........................................................................................21

Education sector & cloud.....................................................................................................21

Adopting Cloud Technology..................................................................................................23

Technology Adoption...........................................................................................................23

Technology-Organization-Environment (TOE) Framework...............................................24

Related literature on cloud computing adoption..................................................................26

Advantages of Cloud based services for Indian SMEs........................................................30

Disadvantages of Cloud based services for Indian SMEs....................................................30

Drivers and Barriers of Cloud Computing.......................................................................31

Benefits of Cloud Computing Factors In Favor For Adoption Of Cloud Computing

..........................................................................................................................................33

Major benefits of Cloud-ERP...........................................................................................34

Manufacturing and services sector’s advantage and disadvantage perception....................36

Management Support For Cloud Computing, Hypotheses Test result................................37

Top management support.....................................................................................................39

4 decision variables on the potential SME cloud adopter, Analysis and Interpretation......40

The Future of Cloud based services.....................................................................................42

 SME sector & cloud.............................................................................................................43

Managerial and research implications..................................................................................43

Applications of Cloud Computing.......................................................................................44

Management support for high growth..................................................................................44

Conclusion...............................................................................................................................45

References...............................................................................................................................49
Introduction
Throughout the world it is acknowledged that small and medium scale industries contribute
to the social and economic development of the world, bringing development and crucial
growth and influencing heavily on the employment, entrepreneurship, providing more jobs,
reducing poverty among masses, helping in rural development and increasing exports within
a nation. The various developed countries in the world viz Japan, Europe, or the USA, have
set up various government policies which act as encouragement for the small and medium
enterprises to thrive and develop and increase the GDP of the nations. Moreover, in many of
the OECD nations, SMEs provide the backbone for job opportunities within the private
sector, which helps in the growth and development of the economy of the nations
(‘Organization for Economic Co-operation and Development, "Policy Brief: Financing SMEs
and Entrepreneurs,"’ 2020). Moreover, studies have suggested that many key drivers have
influenced the growth of SMEs within the economy and one of the highest influencing
drivers is technology. The business environment within the marketplace has changed due to
technology and the social changes have been marked since technology integration has been
done properly within organizations. Moreover, there have been various viewpoints on how
the factors of technology can lead to acceleration or deceleration of the development of SMEs
within the world. Hence, due to this, there has been a gradual development of the integration
of ICT with technology (Houghton & Winklhofer, 2004). Rio-Belver, Cilleruelo, Garechana,
Gavilanes, & Zabalza, (2012) states, this challenge of developing the SMEs further has been
accentuated with the discovery of the cloud, and its application has become a panacea for
these thriving organizations, although there are multiple views of its usage. The main purpose
in which Clouds have started being used by the SMEs is to assuage the scalability and growth
of the businesses, and its simple usage can reduce the SMEs from recurring too large
expenses or incurring potential risks.

Cloud computing within this perspective can be seen from two perspectives, either a business
alternative or a technology offering. However, in the conventional world, the adoption of the
cloud is more beneficially drawn from economic perspectives rather than just research
development or technological perspectives (Etro, 2009). Instead of being seen as a
technological boon and a new invention, from the consumer’s angle, the technology is used
as a compelling business model, driving the economies of scale for the business, and saving a
huge amount of money. As per the delivery of the various systems, the main aim of cloud
computing is to integrate state of the art factors like server consolidation, virtualization, CPU
provisioning, interoperability, drawing on risk-benefit analysis, and having driven by the
business reasons (Mell, & Grance, 2011). In late 2009, the cloud computing concept won the
Gartner Hype’s cycle, and since then the technological perspective has boiled down to its
economic imperatives, being a low-cost option, and being a more efficient alternative than
the conventional mode of computing (Smith, 2011). The main elements of the clouds convert
the upfront capital expenses CAPEX of now to the future deferred operational expenses
OPEX, and hence its adoption into the world is of vital eminence today.

The definition of the cloud computing provides the various functions that the technology
aims to do, and as it is an on-demand service, it helps in self-servicing, it is independent, zero
ownership hassle, elastic, zero CAPEX, pay for usability, and is served through the utility-
based business model (Mell, & Grance, 2011). The major purpose and the utility of the cloud
are to become ease of access for the organizational environment, integrating various
departments, operational processes, and enabling organizations to improve their functional
ability by using the cloud. Cloud is an affordable option in comparison to traditional or
conventional ICT, being more effective and efficient in serving the organization, reducing
expenses which are incurred from the electricity, hardware operations, bandwidth and also
reduces maintenance costs from the in-house expertise that is required, functional staff
presence, space infrastructure and power (Susanto, Almunawar, & Kang, 2012). Moreover,
similarly as per the utility givers, the cloud is also based on-demand, and the customers use
the cloud, services, and computing resources on-demand (Buyya, Yeo, & Venugopal, 2008).
Most of the ICT experts in the world have started recommending the use of cloud technology
for the easy scalability for small businesses, due to some of the aforementioned benefits
(Kourik, 2011). Gleeson, (2020), opines this encouragement from the political, technological,
economic and social spheres have led to high-intensity growth of the cloud sector, and as per
the report of the International Data Centre IDC, there has been a predicted market value of
4$16 billion in 2008 for cloud computing and this has risen to more than $42billion within
four years. To the various organizational needs and personalized business services, many of
the Application Service Providers ASP has started developing cloud technology which might
benefit the purpose (Yeboah-Boateng, & Cudjoe-Seshie, 2013). The main aim of the ASPs is
to develop cloud for the outsourcing of the various business operations, like outsourcing
applications, security, email, communication strategies, servers, collaboration storage, and
other internal processes.
However, there have been various challenges facing the SME sectors in integrating cloud
technology amidst the various benefits provided by the technology. As per data from GoGrid,
the adoptions by the SMEs are in a laggard phase, and the current adoption is much slower
than anticipated, for the benefit and growth of the SMEs (GoGrid, 2020). Since because of its
new development there has been inertia in accepting the model as prime business alternatives.
This is because cloud computing offerings are developed keeping the point of view of the
product development life cycle PDLC and therefore being nascent, there are various
perceived risks from the academic and application world, which outweigh the various
benefits. Cloud adoption across the different sectors like banking, finance, security,
education, within healthcare within the SME sector has therefore been a study of interest
among the scholars in the present world. There are also various risks which are identified by
scholars, which will be propagated within this research. The major risks that are categorized
include the vendor-related issues, no gains risks, security risks, and efficiency risks (Iyer,
Krishnan, Sareen, & Panda, 2013). One proper literature review is generated, the issues about
the risk can be identified and the factors which help in reducing the risk can be brought down.
Until the fear of acceptance decreases the creators of the cloud and the propagandas, have to
assuage the fears and the risks. SMEs decide on various factors before adopting new
technology as per their solutions needed and the organizational structure of their firm. Hence,
the major factors which influence SMEs while deciding on the adoption of the cloud
technology need to be wholly assessed, before the cloud technology can be adopted by the
SMEs. Most of the research on previous literature of cloud computing shows that the research
has been mostly performed within all the industrialized nations which have had a gradual
development among the three sectors of economic growth vide primary, secondary and
tertiary sector (Sahandi, Alkhalil, & Opara-Martins, 2013; Veigas, Naik, & Chandrasekaran,
2012; Rath, Kumar, Mohapatra, & Thakurta, 2012).

New technologies always have risks attached to them, and the different risks are mapped into
perceived risks, latent or real risks. For cloud adoption as mentioned beforehand that are 4
major risks attached, that includes risk from vendors, risks from breach of data security, cost
reduction risks, and risk from system efficiency. The major perceived risks of the system are
the vendor-related risk, and the major issues include fear from lock-in with appropriate
vendors, no chances of guaranteeing continuity of business, reduced reputation after vendor
relationship breach, service availability, and major licensing issues that might crop up. Iyer,
Krishnan, Sareen, & Panda, (2013) suggest, the next type of risks that are real and perceived
includes risk from data security, data confidentiality, data loss, data privacy, governance
issues, and IT delivery. The next risks are the gains risks, and the expectation of gains not
being met, when capital can get reduced, or operative costs might fluctuate, that might not be
sufficient for the existing infrastructure to work well with the cloud computing. The issues
from bottlenecks during the implementation of the cloud, downtime, and other efficiency
impairments are other risks perceived and latent from cloud technology. Risks often occur
within the multi-risk environment and not separately, and these different risks might reinforce
each one that leads to the cumulative effect of the risk, being too heavy on the system (Heiser
& Nicolett, 2008). The loss of data security can be coupled with an incompatible vendor, and
these two together might lead to risks of extending costs and expenses. Different inefficiency
brought by the data bottlenecks or system issues might lead to problems with the vendor,
increasing the chances of a bad reputation. Hence, risks can placate and cumulatively work
together, and this conjoining effect might be an issue for the industries and organizations
implementing cloud technology.

The current literature on the cloud is more focused on the technology and the nascent use of
the technology, instead of its utility within the business sector. There are various studies on
the virtualization of cloud, open-sourced products, proprietary structures, multi-tenancy,
interoperability, and management of the cloud. However, every technology creation needs to
be utilized and boils down to the acceptance by the market (Chesbrough, & Crowther, 2006).
The cloud is yet in between the early adopters and the majority who will accept the services.
The major psychographic profile of the early adopters is to be more adventurous in adopting
new technology and having lesser-known inhibitions in adopting technology as a whole. The
target market of early adopters has started experimenting with cloud and its storage,
computing, and applications. However, the problem lies in the fact that early adopters are
minuscule, and the chance of acceptance of cloud grows with the early majority target
population. The major early majority exists as pragmatists within the market, and once
failures or alternatives to cope with risks are pointed out clearly, these majority will not
accept cloud computing. Moreover, referral marketing s stronger for these majority, and
hence the adoption of this nascent technology poses as an important milestone for the
adoption of cloud among this target audience (Chesbrough, & Crowther, 2006). There has
also been researching that cites that major large-scale organizations can adopt cloud
technology more than SMEs. And the rate of adoption is also faster. Most of the SMEs within
the developing countries have yet of now, made a lesser investment within the new
technology and in ICT as per the above-mentioned risks along with the risk of uncertainty
(Gupta, Seetharaman, & Raj, 2013; Li, Wang, Wu, Li, & Wang, 2011). Hence, these
industries are within the aspect of the early majority waiting for referrals from the early
adopters on the validity, reliability of the cloud computing before investing in something
which is uncertain and might increase cost given the risks (Bhat, 2013).

The major research gap that has been exacted can be viewed that cloud computing within
SMEs has been researched within the developed nations, whereas little research on the
developing countries has been performed as of yet. Most of the least developed nations and
the developing nations in third world countries and sub-Saharan Africa are some of the
examples which have been the major heretics. One of the major reasons behind this gap is
that cloud computing is still in nascent forms and needs time, technology development, and
further research and development for improving the technology further. Most of the studies
done so far are exemplary of the acceptance, adoption, diffusion, and deployment of cloud
computing for the industries and companies. The constraining or the driving factors behind
the adoption of the technology needs to be properly envisaged to understand the stance in
which the cloud computing stands in today’s world (Tan, & Lin, 2012).

Small and Medium Enterprises

The main purpose of SMEs is to develop the socio-economic growth of the nation and
contribute to the global economy through providing employment opportunities, to country
GDP, creating jobs, and developing the current government vitality and technology (Winter,
Gaglio, & Rajagopalan, 2009). Although most definitions provided for the conceptualization
of SMEs are based on employee strength or profitability or size of the assets, the fluctuations
within the world economy of the various currency exchange rates make it baseless to only
provide the monetary-based definitions of the SMEs. When compared to the larger institutes
and companies, the strength of employees or size of the assets are lower, and often the much
lower number of employees makes it possible for these companies to adopt and accept
changes much faster than complex larger sized organizations and also helps them in
exploiting unconventional technology and changes within the marketplace. The SMEs being
the major source of employment and job option within developing nations helps in the private
job offers, and is the breeding space for small scale entrepreneurs to grow and become a vital
employment provider for the country (Karabek, Kleinert, & Pohl, 2011). Within the
perspective of India, SMEs are governed under the micro small and medium enterprises act
2006, and the definition of this sector is based on the size of the businesses, the number of
people they employ, the profit-making capacity, investment within infrastructure, machinery
or plant, and equipment which helps in rendering various services (MSME, 2020). When the
investment of the single business entity ranges from INR 2.5 million to INR 100 million and
the number of employees within the businesses, consists of 25 members to 400 people, the
entities are governed under the MSME act 2006 (Venkataramanaiah, & Parashar, 2007). The
scholars also mention that within the developing and emerging economies like India in
particular, the role of SME within the economic development is huge with a significant
impact on their development. These SMEs, contribute to more than 40% of India’s exports,
50% of industrial output generation, and employs more than 60 million or more people for
the country (Zaidi, 2013). They serve as the backbone of the nation. There are estimations of
more than 40million or more SMEs within India. As per Popli, & Rao, (2009), these SMEs
are particularly reliant on the use of technology and ICT, and engage in an application which
helps them in improving their efficiency, lowers their cost of operations, and uses callable
technology to grow their businesses. The investor to fund the SMEs and the existence of
various portals of trade helps in trading among the various suppliers and the buyers. Other
factors also contribute to the development of the SME sector in India, as it helps in
developing the country’s GDP. Hence government initiatives are also such which enhances
the working of the SMEs, providing them investment opportunities to grow and develop
along with infiltration and adoption of technology (Jain, 2013).

In India, the role of SMEs also helps in reducing poverty issues and regional disparities
among the different regions, by improving the socio-economic growth within the rural areas
and backward regions. The various fields within which the Indian SME sector exists include
textile, electronic assemblies, auto ancillaries, agro base parts and industries, tannery,
machine parts, food components within manufacturing (Zaidi, 2013). Within services, the
SMEs include IT/ITeS, brokerage, consulting, media, healthcare, education, logistics,
hospitality, online services, facility management, and much more. Hence, to develop the
sector further, the use of IT and ICT is essential along with the macro-environmental
conditions like government support, socio-economic factors, and legal environmental factors
that would structure and strengthen the activities of the businesses further. As per the report
published by the government of India department of micro, medium and small enterprises in
2014 – 2015, the SME sector acts as the backbone providing highest private jobs to the youth,
providing 80 million jobs, providing an expanse of 8% growth to the GDP of India, and
increasing 40% of the exports of the nation. Out of the MSME sectors, the research will not
be aiming at the micro-enterprises, but only in small and medium enterprises. As per the
categorization, the small enterprises are the businesses that invest within the plan or in the
business with more than INR 2.5 million, but not greater than INR 50 million. The medium
enterprises on the other hand include those businesses which invest greater than INR 50
million but not more than INR 100 million for industries or service-oriented businesses.
There are various challenges that SMEs face within the developing nations, which are highly
crucial for their existence. These challenges include the various issues like inadequate
finances and funds, lower ability to produce, inaccessibility to the state of the art technology
and innovation, ineffective strategies for marketing, inability to expand internationally or
modernize, and having an absence of trainer or skilled manpower or affordable talents
(Shiralashetti, 2012). However, no one model fits all approach to solve all these issues
simultaneously. All these issues and risks do not come in silos but are cumulative. Hence a
flexible solution that retrieves the organization from cumulative risks is necessary. Utilizing
the latest ICT also helps organizations counter these various risks, and decrease the
inefficiencies. Moreover using ICT is better than having untrained manpower, thereby
increasing competitive advantage for the companies. The various manners in which ICT can
help the SMEs are of significance as the growths of SME s are highly necessary for the
Indian economy. By reducing costs and expenses, faster communication, efficient operation,
streamlining business processes, enhancing distribution strategies, and enabling in better
efficiency within the business, the SME sector can grow steadily in India.

Cloud Computing
One of the major trends and emerging innovation within the world in the contemporary age is
the concept of cloud computing. This technology is ubiquitous in nature and is hence more
opportunity for all types of business entities for improving and streamlining their operational
efficiency. There has been widespread research over the concept and application of cloud
computing in the world, and the various benefits extrude from the technology. But various
writers and scholars who have analyzed and evaluated the concept have mostly focused on
businesses existing within the developed economies, and seldom research is made on the
developing and emerging economies. There are various working definitions based on cloud
computing which is mostly exemplary of the key benefits and features of cloud computing.
There are various characteristics of the technology that differentiates and contrasts it from the
other technologies. The workable definition which has been provided by the National
Institute of Standards and Technology NIST in 2011 is describing cloud computing as a
ubiquitous model, which works on on-demand access, is convenient to use, and through this
network access connects to a shared network of configurable computing devices, like servers,
network, storage, services, applications. This network through rapid provisioning and better
management reliance and efforts, interacts with the provider, through an umbrella networking
model (Mell & Grace, 2011). According to NIST, there are three types of cloud computing
models that help in the workability, including cloud infrastructure on the services; cloud
software as a service, and cloud platform as a service. There are also four types of
deployment models used by NIST, which include the community cloud, public cloud, private
cloud, and hybrid cloud models. The main purpose of the cloud computing software is to
provide essential services to the users, who do not have effective and relevant information
within the technology structure. Hence, the term service on the cloud has also emerged
(Amini, Sadat Safavi, Sohaei, & Noorbakhsh, 2013). There are five major characteristics and
factors which are essential for the existence of cloud computing. These include their on-
demand self-service model, resource pooling characteristic, broad network accessibility,
measured services, and rapid elasticity (Mell & Grace, 2011). As per the three categories, the
cloud categories include IaaS, PaaS, and Saas, as mentioned beforehand, and these three
models help in deployment, as per the cloud computing availability, and the various access
points. The type and nature of information denote the limitations of access or provides the
access permissions, along with the various business processes, and the organizational
features. If assuring that the authorized users get wholesome access to the cloud, some
organizations make use of a limited environment for running a cloud, and by this, the cloud
can be deployed using certain resources (Amini, Sadat Safavi, Sohaei, & Noorbakhsh, 2013).

Although most people are not aware, the use of cloud computing has touched our lives in
some way or another in daily activities. Most of the cloud-based services in which people are
attached with our free email services, everyone accesses daily, or the use of social networking
sites, the audio, video, image sharing services, all use cloud computing which is used by
consumers either directly or through indirect means. Also, different features used by
consumers like online sharing, online collaboration, storage of information, ad content
management tools all use cloud technology wherein all information is gathered, stored and
maintained over the cloud, accessible for many (Amini, Sadat Safavi, Sohaei, & Noorbakhsh,
2013). The technology can be described using the analogy of electricity usage in homes and
paying peruse, and the consumers are most interested in whether they get full tie power
supply instead of analyzing from where the power is being generated. Either the power is
generated through wind, thermal or hydro energy but when different states cannot produce
enough power, a common grid is used for storing and sharing electricity so that every person
gets regular power supply. Through cloud technology similarly, different virtual software,
content, machine, the application is rented and this sharing is more user firmly and less
costly, along with high easiness. Moreover, all the servicing can be done based on the
requirements. Within cloud computing, there are no barriers to exit or to enter, and the means
of providing suitable permissions, through computer assets like storage, network, application,
server, can be reserved easily without wasting much time and resources (Rawal, 2011).
Through the use of cloud computing focus on other activities and spending efforts in IT is
reduced, and users can concentrate on their efficiency and speed of operations. The different
multiple vendors, application upgrade, software updates, data center, space, storage, business
continuity, disaster recovery, integration, power, connectivity, database, manpower operating
systems are all collaborated over the cloud, and users do not have to give undivided attention
to all (Amini, Bakri, Sadat Safavi, Javadinia, & Tolooei, 2014).

Through the SaaS, IaaS, PaaS, users can self-care their applications or their software, through
premeditated self-service channels in form of web browsers or interactive voice responders.
Some of the examples of the cloud are Microsoft Business productivity suite, Zoho,
Force.com are some examples of SaaS. IaaS, provides more flexibility to users, for their
operating system or application to use as Amazon or Go-grid. Within PaaS, the applications
can be devised, built, or installed through cloud computing like Google App, Azure platform,
and others. As per Rawal, (2011), cloud computing deployment through private, public,
community and hybrid models are used by the businesses, as per the data stored, or the
security needed and the type of organizational structure and management. Public clouds are
used when the information is made available over the internet and gets shared among the
public as public feed. When data gets shared only among a group of identified people it is
community cloud (Amini, Bakri, Sadat Safavi, Javadinia, & Tolooei, 2014). When the
security is high and the data is specifically shared with one or a few people it is a private
cloud. The hybrid clouds use both features of private and public cloud, and the data is partly
shared, and secured as per the arrangement of the VPN.
Cloud based services in India in different industries

Cloud Computing in India

The majority of the people in India directly or indirectly use cloud computing. The majority
of the email services that are offered freely are often cloud based in nature. The cloud
computing has started developing in Indian market as well. The activities which are there
involve sharing of online information and storing as well. The collaboration activities are also
provided by the cloud computing services. The content management can also be considered
as an activity which is done by the cloud services. The services that are provided by cloud are
something is being paid once the service is being taken. Even cloud can be returned in case it
is not completely used. The cloud computing can be considered to be a free economy. The
cloud computing can be considered to be one of the service that is likely to provide with
increased IT efficiency. The predictable demand for it is likely to be exceeded because of the
possible prediction. Once the initial cost is over the cloud computing can be considered to
provide with significant amount of advantage (Aggarwal and Barnes, 2010). The advantage is
on continuous basis. There are different things that are to be provided by cloud computing
which involves licensing, maintaining support, service, giving storage and space etc. The
disaster recovery is also done by this technique. So, numerous aspects are benefited because
of the cloud computing service. The key benefit that this tends to provide to the SMEs
involves the IT facilities. The SMEs do not tend to have enough man power. This man power
cannot be considered to be available to the SMEs. Thus the cloud computing can provide
with significant amount of advantage. The payment is only done for the amount of service
that is being availed by the companies. Especially infrastructure of IT can be considered to be
of benefit for the budget of the SMEs. One single server to multiple amount of server is
available by the means of cloud computing (Agostino et al., 2013). The cost of capital is the
aspect that is reduced by the use of Cloud computing.

The cloud computing market in India from the time period of 2017 to 2020 shows that there
is a growth of 38 percent. This in terms of market valuation is a growth from 1.81 billion
dollar to 4.1 billion dollar. Among the three components of Cloud that has been stated before
the aspect of providing infrastructure has been the major contributor in terms of growth in
India. The IaaS growth rate has been 49.2 percent during the same time frame. This is
followed by software services that are offered in cloud. The SaaS has provided with a growth
of 33 percent in the Indian market. Last is the platform based service that is offered. This
service that is the PaaS has grown at a rate of 32.1 percent (Rao, 2010). Thus the cloud
computing services can be considered to have a growing market in India. Both the public and
private sector is adopting the services that are being offered by Cloud. The game changing
aspect of Cloud growth in India lies in the adoption of the public sector. The public sector in
India has been adopting the services that are offered by Cloud. The cloud computing in India
is a recent development and it was almost difficult to imagine the place that this service has
achieved by the year 2019. The online services that are being offered are greatly helped by
the cloud computing services and regardless to mention is the amount of help that the Small
and Medium Sized Enterprises gets in India because of cloud. The public cloud service has a
projected growth of 17.5 percent in the year 2019. The compound annual growth rate of
cloud computing is 22.5 percent within the public sector in India. The expected amount of
expenditure that is going to be done by the public sector is going to be 370 billion dollar by
the year 2022. So it can be stated that this is one of the fastest growing industry (Alshamaila,
Papagiannidis and Li, 2013). So there is market for cloud computing in India. The public
sector is biggest aid to the SMEs. So there is a possibility that the SME is going to aided by
the high amount of cloud computing by the Public sector in India. It is regardless to mention
that the private sector has also been adopting cloud computing at a significant rate.

Deployment of Cloud Computing in India

There is significant amount of financial benefit that is present in case deployment of cloud
computing is done in India. The Boston Study Group in its research has suggested that the
CAGR is going grow at a rate of 25 percent. The deployment of cloud computing in India is
likely to provide benefit of a sum of 100 billion dollar to the overall GDP of India. The IT
industry is impacted by 15 percent of GDP and 25 percent of textile industry GDP is
something that has increased because of the contributions of the cloud computing services.
743,000 jobs in India in the year 2023 are to be impacted by deployment of cloud computing
in India. Thus there are several evidences of the deployment of cloud computing and its
benefits to the entire country and its financial performance. India has been no exception in
this case. The deployment of cloud computing has only contributed in the betterment of the
economy of India. There is also prediction that there will be 2.4 Lakh new jobs that will be
created because of cloud computing in India by the year 2023 (Bonfante, and Dawson, 1993).
Some of the large companies that have adopted cloud computing involves Salesfroce.com,
Google, IBM, Oracle, Microsoft etc this is the global scenario but in the micro level scenario
in India the small and medium sized enterprises have also been engaged in the deployment of
cloud based computing services as well. Some of the examples of these companies involve
Janalakshmi Financial Services, Redbus, Su Kam etc. The large companies in India that are
engaged in using of cloud computing involves Tata Motor, Infosys etc, HDFC bank etc. As
discussed earlier in this section it can be stated that the adoption of the public sector of Cloud
computing has also benefited the chances of benefit of the SMEs as well (Alshawi, Missi and
Irani, 2011). The government can communicate with the common people by the use of this
department. Some of the services that are cloud computing based in India that are used by the
common public involves Railways, passport, visa and immigration etc.

Cloud based awareness in Indian SMEs

The size of the SMEs being small and their organisation structure being more efficient
provides various advantages to these businesses including proper communication among the
managers and employees, and ability to execute decisions faster which is not available for the
other large-scale organisations. There are also disadvantages faced by these organisations,
due to their inability to access vital resources for the organisation. These resources mostly
include vital resources (Winter, Gaglio, & Rajagopalan, 2009). Like finances, human
resources, and these limitations makes the organisations inefficient in making speedy delivery
of services, financing, controlling, planning, monitoring or training is often missed or are not
efficiently developed due to such limitations. Moreover, of the major issues is keeping
expenses within the financial control of the SMEs. Moreover, it is yet impossible for the
SMEs to develop their technology and expending much money for the IT development and
infrastructure development. Moreover, although high costs are included, many of the IT
projects may also fail, and most of the IT projects are often cancelled before the project ends,
and less than one third of the projects are finished within the budgetary limits and time.
Moreover, for IT investments SMEs bear less costs or risks attached with ICT in fear off loss
making (Karabek, Kleinert, & Pohl, 2011).

As per Sharma et al., (2010), the Indian institute of technology Bombay had recently
performed a market research on the awareness of the cloud computing technology as a
business development platform by the SME sectors within India. From all the 63 SME
organisations which took part within this study, it was seen and analysed that the awareness
generation of SMEs to use cloud computing or different means of ICT in developing their
businesses was low. More than 44.5% of the SME organisations told that they did not have
skilled employees who could work on the cloud-based technology. 51% of the SME
companies were aware about the concept of the cloud but they did not have any connection in
using cloud within own organisation. Out of these 51%, 24% of the companies were
interested themselves in adopting the new form of technology within their own company
(Sharma et al., 2010). One of the major reasons why cloud computing has yet not penetrated
the different SMEs within India is the lack of the awareness of the utilisation of SMEs,
although SMEs do know about the various benefits of the cloud computing. These SMEs do
not want to risk their investment into something which is yet on the nascent stage of
development. Awareness about the ICT and the cloud can help in developing the idea of
integrating and assimilation these services into their own businesses. Although both
advantages and disadvantages of using cloud technology is known within the perspective of
large-scale organisations, the risk of uncertainty still exists among the Indian SMEs. Cloud
technology is a new innovative computing paradigm, which has many advantages to the
companies. The major advantages of using the cloud computing includes flexibility, reduced
costs, scalability, which can be offered to the SMEs. The cloud computing also helps in
developing the competitive advantage of the company, and spending huge amount of money
through sophisticated technology. These efficient facts to help in improving the functions,
business processes, making productivity and innovation within the businesses, and focusing
on the new businesses (Venkataramanaiah, & Parashar, 2007). For both existing businesses
and start ups such cloud computing can be used. Cloud computing services can be improved
to specialise IT. Relying on the various centralised data centres, and improving the better
economies of scale. The security measures of the cloud are always implementing a large
scale, making it cheaper due to economies of scale. According to empirical studies of Das &
Das, (2012), there are various factors which influence the adoption of cloud computing and
ICT innovations by the SMEs. For the industrial benefits, ICT manages various advantages,
which helps in operational efficiency of the businesses. The socio-economic development is
brought by technological development and innovation, which brings in competitiveness
among the different organisations, but still then the level of acceptance of ICT within SMEs
are low, within the developing nations (Achimugu, Oluwagbemi, Oluwaranti, & Afolabi,
2009). SMEs due to lack of finances, do not try new technology which might increase their
costs and expenses, and moreover many companies do not find ICT compelling and
innovative, which does not require them to adopt the technology.

Within India as like in other developing nations, SMEs form the lifeblood of the economy
and through better government initiatives are growing as a faster pace than the precedence
trend. They are known to act as the silent drivers within the economy of the nation, providing
jobs, services and improving the competition within the marketplace. Moreover these
companies drive global production, imports and exports and have high influence over the
global economy as well. Most of the industrial units of SMEs in India are SME based about
50% SMEs out of the 95% industrial units within India (Popli, & Rao, 2009). Hence, as the
backbone of the economy, most of the SMEs of India are also the aggressive implementers of
ERP systems, in order to improve their processes and operations. Because of the complexities
within large organisations along with data security issues of the large organisations, there are
communication issues, which can be tackled well by the online services provided by the
small industries per se. most of the SMEs have fixed costs and budgetary allowances for their
IT investment and requirement. However the main issue arises when, the requirements of the
traditional ERP system is not met by the expected specifications, including the expenses and
the costs of business. The gap which is present between traditional ERP specifications and
the SME requirements, are analysed within the organisations (Jain, 2013). The traditional and
conventional ERP vendors cannot bring down their benchmarks or standards as per the
requirement of the SMEs, and also it is not feasible to also increase the scope of the project
and the scale of ERP when the businesses increase in strength. This leads to monetary issues
and loss in sales for both the parties or for either one of the parties. As per the associated
chamber of commerce in Indian SME reports the predicted growth rate of 35% in SMEs is to
increase to 40% by 2015. And most of the SMEs about 60% are developing their businesses
into IT based technology services, infrastructure to increase their productivity and to reduce
the input expenses. SMEs are one of the developing divisions and rewarding commercial
centres for the execution of big business arrangements (Zaidi, 2013). As the conventional in-
house execution of ERP arrangements brings about significant expense for the SMEs so it
turns into a significant requirement for them. So, our purposed distributed computing cost
effective model depends on utilizing the cloud web administrations as a substitute for ERP
arrangement by paying just for what the SMEs really use. By utilizing and getting to
administrations through the cloud, the organizations can purchase segments applicable to
their business on pay per premise as opposed to purchasing entire ERP suite.

Within the sphere of cloud computing most SMEs do not have own infrastructure, and
therefore they do not need to provide any form of capital expenditures or costs, and thereby
they can utilise the services and also pay as per their usage as per the cloud terms. SaaS also
makes sure that automation is provided to the businesses, by reducing all the typical
investments through the various IT infrastructures. All costs are mostly minimal through
cloud-based services within the SME industries, based on the premise of ERP adoption, and
using suitable software, hardware, training, up gradation and licensing costs. The higher
implementation cycles also engage various maintenance costs, which adds further to the
tradition ERP systems. As per
Shiralashetti, (2012), most of the small and medium businesses are in need to adopt easy
solutions and using technology within business processes, as per the changing needs of the
customers, and the higher increase within the total customer base in the industry. Moreover,
providing ERP and CRM solutions needs to be integrated wholly with the system, in order to
reflect to the technological changes, that need better up gradation of the system, and that
reduces the issues within the ERP from scaling up. Moreover, through specified changes
within the technology, the software is changed and upgraded frequently for improving the
competitive advantage within the business; more simple process is also required to reduce all
these complexities and the need for up gradation every time new software is launched in the
market (Amini, Bakri, Sadat Safavi, Javadinia, & Tolooei, 2014). This process is
cumbersome and a syncing system is automatically needed to improve the condition of the
services. Most of the Indian and the foreign SMEs within India are focusing on digitalisation
and the concept of loud in order to improve the services. As indicated by Leslie D'Monte,
Cloud processing is giving gigantic open doors for the Indian IT organization that is helping
them to create financially savvy plans of action. Such models help the SMEs to elevate their
business in a viable and cost proficient way (Rawal, 2011). The advertiser of 'The India
Cloud Activity' Vijay Mukhi said that “there is an immense sparing of cash by utilizing cloud
innovation as the enterprises need to pay just for the working expense. The greatest bit of
leeway of a facilitated model (distributed computing) is that it annihilates the need for
product licenses and furthermore disposes costs related with creating and working in-house
applications. In a facilitated model, the security, capital investment, maintenance costs and
backup costs are responsibility of the servers and providers”.

There is high risk perception among the SME sector, including the vendor related risks and
issues, which actually dominate across the SMEs, thereby increasing the apprehension in
using cloud computing or innovative ICTs (Iyer, Krishnan, Sareen, & Panda, 2013). The
cloud is an offering and there are many vendors within multiple layers of the cloud, which
provides various storage options and computing at the hardware level. There is also
ambiguous nature among users on the actual vendors of the cloud technology. The cloud
utility vendor provides hardware storage and computing, and her are other layers where
vendor packages apps like ERP or CRM, with the hardware involved. The intermediary SaaS
provider acts to intermediate two or more amalgamation of services within the cloud, and
during trouble shooting the ambiguity of the user increases more. These dilemmas increase
the risk of vendor cloud computing. Moreover, through cloud different offerings are available
which can be used through conjoined means or independently as well as per the utility. These
offerings together are termed as XaaS, and are inclusive of the SaaS, PaaS, AaaS, IaaS, NaaS,
and others (Iyer, Krishnan, Sareen, & Panda, 2013). There are independent aggregating
vendors for each of these along with independent sourcing vendors. Moreover each offering
is also prices per unit differently, and all these in totality might increase the risk perception of
the vendor within the SME sectors. Moreover, within SMEs most of the decisions are taken
by the management or the top manager, which might not have enough insight into the matter
and adoption of the cloud computing in their services, which can be decided through the IT
think-tank.

Moreover, the SMEs understand need for troubleshooting of the cloud, and there is not
availability of current any feedback paths which can help in solving the cloud adoption
issues. These in change increases the vendor risks in the company. These vendor risks can
also be added along with the risks of data security, privacy of data, and associated losses, also
inhibit adoption of the cloud by the SMEs as these might increase the expenses and the costs
(Iyer, Krishnan, Sareen, & Panda, 2013). The most important risks are therefore garnered by
the vendor risks and the security risks of the company, which increases the risk even before
implementation of the two risks which are perceived. The risk from efficiency is generated
after cloud is actually adopted by the companies, which therefore makes the risk come within
the third place, and often the efficiency related risks are not perceived before the cloud
technology has been adopted by the companies. The SME are ways adept to utilising cloud
ethnology for gaining money and reducing the costs of expenses, however, the risk
perception of no gains is lesser than other risks. Therefore, the ambiguity from vendor de-
escalation, data security authentication, and the efficiency of delivery is most common
problems and risks faced by the SMEs, and therefore certain risk mitigation must be adopted
in order for the cloud technology to be selected by the SME (Iyer, Krishnan, Sareen, &
Panda, 2013).
Use of Cloud Computing In Different Sectors

BFS sector & cloud

The security of data is one of the key concerns. Now the banking and financial sector can be
considered to be a sector that has high data security issues. The security risk holds the highest
issue for the banking sector. The type of concerns that form the part of the risk perception of
the BFS sector is the loss of data, intrusion in privacy, confidentiality issues, possibility of
cyber hacking risk etc can be considered to be the types of risk that is associated with this
sector. There are several benefits for the banking sector in adopting cloud computing services
as well (De Assunção et al., 2009). The benefits that are enjoyed by the banking sector
involves the aspect of flexibility that is much needed for this sector, the range that is offered
by this sector from very small level to the large level of service that is being offered and at
the same time the huge range of pricing that is being provided by this group as well. The
research conducted on SME sector suggests that even though the sector is in verge of
adoption of this technology there is significant barriers that are faced in its implementation by
this sector as well (He and Xu, 2015). The downside is likely to be higher in comparison to
the positive side in terms of apprehension as a result there has been a strong barrier in the
adoption.

However, there is significant amount of importance in the assessment of the possible risk that
is provided by each of these factors and the possible benefits of the cloud service on the
banking and financial sector. The main risk lies in the transaction of the non cash money
which is being transferred by the bank. The banking sector can be considered to be a potent
sector for the effective use of cloud computing. The risk that is associated with inefficiency
can be highly expensive for the BFS sector in comparison to any other sector of business. The
other type of financial sector which involves the foreign exchange market, stock and
commodity market can be considered to be sectors that have been able to make use of this
type of service easily (Joshi, 2014). This type of latency can be introduced in cloud by the use
of cloud and internet.

The banking sector can be considered to be one of the most organized sectors in the market.
This sector often tends to have a tendency to be able to have experts in house of the company.
There is strong service level agreement that would be formed by the company as well. So the
insecurity relating to vendors is not likely to be significant for the purpose of the vendors.
The banks tend to have in house experts as well. Another key risk in this sector lies in the fact
that there will be no significant benefit that will be provided by the implementation of this
system. Then the taking of risk will be something that will be pointless in terms of cost
benefit analysis. There is no significant amount of benefit that is provided by the
implementation of this step. The taking of the minimum amount of risk for no statistically
significant event can be considered to be something that is not important enough for taking
even the minimum amount of risk (Armbrust et al., 2010). But HDFC bank in India can be
considered to be an example of banking and financial sector establishment that has
undertaken the step for starting of the implementation of cloud computing.

Hospital / health sector & cloud

The healthcare sector can also be considered to be a sector that holds high level of risk as the
operation of it involves the lives of people as stake. Thus the perception of risk in this sector
can also be considered to be very high. The vendor related risk for healthcare sector is low as
well because of the fact that this sector is basically an organized sector like the financial
sector as well. The compromise of data or information can be considered to be something that
holds moral responsibility as well. The healthcare sector with the advancement of technology
has ensured that most of the information is stored by the hospitals in non paper manner. This
tends to increase the risk of data security in this case. The concerns for the healthcare sector
are quite different from the other sectors (Rittinghouse and Ransome, 2016). The concern for
this sector is the availability of required information at the time of need. The procedures that
are time sensitive in nature have to be done by being aware of the required data. The loss of
this efficiency is the first concern for this sector it is important to mention in this sector that
among all the sectors that are discussed in this section the aspect of efficiency tend to hold
highest amount of importance for this particular sector only. The second aspect is similar to
that of the banking sector that is in case there is no benefit that is associated with the
implementation of this system. In such condition the whole investment that is done on this
and taking of even the meagre amount of risk for this purpose may not result in benefit so
there is no reason for taking that risk anyways (Behrend et al., 2011). Thus it can be stated
that these are the two key barriers that is faced by the banking sector regarding this topic.

Education sector & cloud

The education sector on the other hand can be considered to be an organization that is
significantly threatened by the vendors. The students in education sector also tend to be user
of cloud computing. The variability of load tends to be high because of the variety of the
students that are present within the sector. This results in the aspect of provisioning. This is
because provisioning is a factor that is when there is high amount of load there is a possibility
that there will be service outages. This is one of the common things that tend to occur in the
education sector. There are seasonal ups and downs in this sector. Thus the up seasons tend to
involve high level of work load. This is one of the factors that create complication in terms of
provisioning. There tend to be variability in terms of load in the education sector which can
alter on daily basis or even in different seasons. The researchers suggest that the post dinner
hours are one of the time periods in the education sector that tend to have a high amount of
demand for internet among people (Popli and Rao, 2009). This is the time period the
maximum amount of study material is taken from the cloud system especially in India. In
terms of seasonal variation it can be stated that during the time when the college admissions
and other such educational cycles begin the cloud downloading activities tend to increase
significantly. So in such situation the affording of a certain amount from the cloud is likely to
be under tremendous amount of pressure for certain period of time and during the other times
there is a possibility of loss of opportunity cost for those who have subscribed to those
services. So it can be stated that this method should not considered being effective in terms of
cost. There are enhanced types of services that are present in the cloud system that is the
cloud bursting which can be considered to be able to use both the private and public domain
depending on the demand that is placed on to it. These technologies in cloud can be
considered to be something that is still under construction and cannot be considered to be full
grown services (Capachin, 2010). So the only option that is available till now is the
provisioning system that is present in the market only.

The vendor fear can be considered as a real threat in the educational sector. The
unpredictability of the vendor can be considered to be a source of worry in this sector. But
there is not much concrete basis for this type of fear. But the barrier that is created by it is
something that cannot be overcome by the customers. The vendor risk being the prominent
one in this sector is being followed by two other key source of risk that is security and
efficiency. And lastly there is always that predominant fear that is present across the sector is
the perception that there may be no gain at all in the application of this system. The cloud
computing has been successfully able to sell some of the solid products to the newly adopting
market that is the CAPEX and OPEX (Jeanne, 2012). The perception of risk is varied among
the different sector that has been evaluated.
Adopting Cloud Technology

Technology Adoption
Technological adoption can be considered to be one of the factors that is challenging for an
organization. Proper research has to be conducted for the purpose of finding the adoption of
technology and its implementation in a sector. The cloud computing can be considered as one
of the activity which is still in very early stage. Thus the majority of the business
organizations are still evaluating whether to implement cloud computing technology within
their business organization. This is one of key concerns for those organizations which have
short term existence. There are different type’s models which help in the adoption of
technology by different business organization. Some of these models involve Technology
Acceptance Model, technology organization environment, Diffusion of innovation, Unified
Theory of Acceptance and Use of Technology and Theory of Planned behaviour. These are
some of the key models that can be used by the organization for the purpose implementation
of technology within the organization. There are different researchers that tend to implement
different models for the purpose of the success of the organization (Chatman, 2010). The
most popular model among those that has been stated above is Technology Acceptance
Model or the TAM.

The technology acceptance model can be defined as one of the information system which
helps a business organization for the purpose of adopting technology. The implementation of
technology can be considered to be used in such a manner that everyone can use it. There is a
need of creating behavioural intention. This tends to help the people in the use of technology.
The influence of behaviour can be considered to be one of the key factors in the adoption of
technology. Behavioural intention can also be defined as attitude. The general impression of
technology is dependent on the aspect of attitude. The employees or workers within an
organization when given a technology can behave in two different manners. One of the
manners is perceived usefulness, perceived ease of use. The perceived usefulness as the name
suggests can be defined as the perception that is in the mind of the people about the
usefulness of technology. The second aspect that is applicable in this case (Brian, 2009). The
ease to use can be considered as the second aspect that is of importance in adaptation to
technology.
Technology-Organization-Environment (TOE) Framework
The adoption of technology and its method has been developed by the TOE framework. This
framework has recognized three of the key factors that can influence the adoption of
technology by any business organization. These three factors involve technology,
organization and environment. These are the three factors that tend to influence the adoption
of technology by an organization. The process of adoption is something that has been studied
by many scholars by using this framework before. There have been several empirical studies
which have been done by the use of this framework. The TOE evaluation method is
organization led activity as opposed to an individual led activity. The TOE method has been
used in this particular case for the study of adoption of cloud computing by the SMEs within
India (Giniat, 2011). The external environmental context of the operation of SME is
something that has been done in this research as well.

The aspect of technology has taken into consideration the internal technologies and external
technologies that are available in the market. The existing technologies can serve as an aid for
the adoption of cloud computing. Some of the internal technological factor that is likely to
impact the adoption of cloud computing involves some of the factors like the number of
computers that are used by the organization and the general level of technological efficiency
among the people. The compatibility of cloud computing with the existing systems can be
considered to be one of the important factors as well to understand the level of adaptability of
cloud computing within the organization. The ability of an organization to transfer its
knowledge across the origination can be considered to be one of the key factors of
determining factor of the successful use of technology (Iyer et al., 2012). The aspect of
organizational context is another key factor that influences the adaptability in this case.

The organizational context involves the size of the firm, the decision making system of the
company that is how much centralized or decentralized is the decision making system. The
management structure within the organization can also be considered to be an important
factor in the adoption of technology. The quality of the people working within the
organization is a strong determining factor in this particular case. The organizational size can
also be considered to be one of the important factors in the adoption of technology as well.
The large organizations and their method of adoption and the small organizations and their
method of adoption tend to vary significantly. It has been observed that the small firms
generally tend to be more adaptable in terms of integrating of new technology in comparison
to the large business firms. They are more capable of adopting to cloud computing service in
compared to the large size organization (Yang and Wang, 2009). The technological adoption
capability can be categorized by some of the key factors like cost, competency, general
organizational culture and resistance among employees of the organization. The organization
and its readiness is adapting to technology is affected by these factors primarily. The
structure of an organization along with the evaluation of whether an organization is
mechanistic and organic in structure can also be considered to be one of the contributing
factors in the adoption of technology. The macro environmental factor as stated before also
tends to influence the capability of the organization. One of the key macro environmental
factor is the structure of the entire industry in which the organization belong (Iyer et al.,
2013). The level of competition that is existent in the market can also be considered as a
factor that belong to external environment which also has an impact on the performance of
the company in being open to new technological innovation.

There are some factors like government incentives for the adoption of technology that tend to
increase the pace of technology adoption. The government often tends influence by the means
of regulation. The external suppliers and their availability can also be considered to be a
factor that influences the adoption to technological advancements. The type of industry can
also be considered to be a determining factor in some cases. There are some industries that
are emerging in nature whereas others that are declining over the period of time. The ability
to adopt new technology can be considered to be a factor that tends to be high in case of those
industries that are in a stage of growth or moving in an ascending curve. The main reason for
this is because the industries that are emerging often tend to compete for the purpose of
staying relevant in the market wherever there is competition present in the industry there is
higher possibility of growth. There are chances that the company will be more mobile for the
adoption of technology because they would use it for remaining competitive in the market
(Ahmed and Chowdhury, 2009). The SMEs can be considered to be the industry sector is
heavily been encouraged by the government especially in India. This is a segment that has
been highly incentivized by the government. There are different policies and legislations that
have been formed for the purpose of ensuring that this segment thrives in the market. The
laws and policies that have been formed has been a big support for the SMEs to be able to
grow and develop and adoption of technology can be considered to be one of the aspects that
contributes in the growth and development of a sector. Thus it can be stated that according to
the technology organization and environment factor the technology adoption capability and
the environment in terms of external environment is conducive to the adoption of this
technology. But the other factor that is likely to be a determining factor in this case is the fact
that individual organizations and their activities can also be considered to be a factor that is
highly determining factor as well (Low et al., 2011). So individually the organization that is
adopting the technology can also be considered to play a vital role in determining the fact
whether cloud computing will be easily integrated or not within the organization.

Related literature on cloud computing adoption

There has been several studies conducted which is related to the cost and technical aspect of
cloud computing. Different theoretical factors have been considered in this as well. There
have been several theories that have been used for the purpose of understanding the way in
which technology is being accepted by individuals and business organizations. The aspect of
cloud computing has also been researched the level of acceptance of cloud computing among
individuals and business organizations. Some of the key theories in this regard are TAM of
technology acceptance model, DOI that is diffusion of innovation model, unified theory of
acceptance and use of technology model and lastly the technology organization and
environment model. These models have formed the literature review regarding the acceptance
of the model. Often enough to understand the nature of the type of acceptance among the
organization regarding the type of the technology there is a need of implementation of more
than one model. There has been certain amount of research that has been conducted which
has been done to understand the level of acceptance of new technology acceptance from the
perspective of the SMEs. This is likely to provide with an idea of how SME can react to
adoption of cloud computing as it is an example of new technology as well. These studies can
be considered to be relevant for developing countries as SME tend to be prevalent form of
business in developing nations in comparison to developed countries. There are some factors
that tend to impact the selection process of new technology which involves the advantage that
the technology is providing to the company, the aspect of concern in terms of security for the
company, the support that the company receives from the top management of the company,
the existence of competition within the company, the ability of the people to adopt
technology and the pressure that they receive from the partners with whom the trading is
done can be considered to be the summation of the factors that tend to impact technology
adoption. There has been study conducted on the micro and small businesses which suggested
that the key factors that tend to influence the most involves the usability of the system, level
of security provided by it, the amount of privacy that is present in it and the amount of
expense that is to be reduced because of the use of this technology. There has been no model
that has been studied in the case that has been mentioned above regarding the study that has
been conducted in this case. As it has been mentioned before there are models that are often
used like TA, DOI or TOE. There has been study that has been conducted on the key
successes of the businesses especially regarding customers which are using the cloud
computing services. The factors in this study that has been identified to have resulted in the
success of the this involves the success in the functionalities of the software, the data and its
accessibility, ability to response to the customers when there is an enquiry, ability to handle
large number of data of customers and the expense of implementation has been recognized as
the factors that results in the success of the cloud (Kambil, 2009). However, it is important to
mention in this section that the data that has been used in this study has been collected of only
the SMEs that have used only one simple type of cloud computing service. There have been
separate studies conducted for evaluation of cloud computing especially in context to
developing countries as well.

One of the studies has been conducted in Kenya which has studied the adoption of cloud
computing by the SMEs that are operating in Kenya. This study have provided with detailed
information of the impact especially in context to developing countries. The study conducted
in Kenya suggested that the factors that are applicable for developing countries involves the
support of the owners or top management of an organization, the size of the firm can also be
considered to be one of the factors. The ability to adapt to technologies has proved to be one
of the factors that has impacted the adoption of cloud computing. The possible advantage that
this service has provided to the firm can also be considered to be a factor that has been
considered in this case as well. The factor of competitiveness and complexity has also been
factors even for emerging economies as well. The computability factor has also come up as
one of the key factors in the adoption of cloud computing in developing economies. The
method used in this study for the analysis of the fact has been descriptive method thus it can
be stated that there is no much relative analysis that has been done so which factor has more
influence than another is something that has not been evaluated in this case. The ERP based
cloud computing service has mostly been analyzed in this case. In case of ERP based cloud
integration it can be stated that the expense of ownership, investment done at the very
beginning, the opinion of the vendors in creating a co creation for the customer, products that
are being offered in this case, the general benefit of the company in the implementation of
this technology and the general benefit of this technological advancement can be considered
to be the factor that has provided with a significant advantage in this case. So it can be stated
that this finding is something that cannot be generalized with most of the other types of
software that are being used by the other businesses that are operating in this case (Fox,
2012). This is a specific case where cloud based ERP is being used. This application has also
been evaluated in developed economy and not a developing one. So there is some narrowness
in this scope.

But one of the key factor that has been identified in this research is that comparative
advantage, lack of surety, geographical restriction, possibility of having trials, the size of the
organization, the support of the owners or high level officers, experience level, the level of
innovation within the industry, scope of the market, the level of effort provided by the
supplier and the support that is received from the external computing. The generalization
even though has been difficult for this study because of the little size of sample that has been
selected in this case. There are studies as well which are conducted in India regarding the
adoption level of cloud computing in India. These studies suggests that those organizations
that are especially engaged in services like that of data centres, data mining etc tend to be
much benefited by the use of cloud computing. There are some other advantages that are also
received by this sector because of the implementation of cloud computing. This involves the
activities like less amount of investment that is done for the purpose of scalability of the
business, even faster growth and up gradation can be considered as some of the key aspects
which provide this business sector with competitive advantage by the implementation of
cloud computing. At the same time less amount of investment has to be done by the SMEs on
the hardware because of the types of services that are being offered by the cloud computing.
The benefits provided by cloud computing and the awareness of it has been the main focus of
this study as well. Thus it can also be considered to be a study that is not complete in
providing the information (Leavitt, 2009). The extensiveness of the context is something that
has not been evaluated in this research.

The importance of the variables has also not been considered in this research as well. Thus it
can be stated that this research is also to some extent lacking on effectiveness. So it can be
stated that from the evaluation of the entire literature review it can be deduced that there is a
need for conducting extensive study of all the factors that is a more holistic approach is
required for the implementation of this study. Just like this study has been done for the
purpose of evaluation of the cloud computing and its acceptability among the small and
medium business organizations. There has been a study that has been conducted which has
frameworks for the evaluation of these aspects as well. Some of the models that have been
used in this regard involve the DOI and the TOE framework. This study has used the
characteristics of DOI which involves security, privacy and reliability. These are the factors
that have been evaluated in this case. The other factor that has been evaluated involves the
aspects like support of the top management, pressure of competition, cost benefit analysis,
concerns perceived etc. The other factors have been evaluated by the use of TOE framework
for this particular study. The two key constructs in this case involves the perceived benefit,
relative benefit, competitive pressure and support of the top management. The analysis of
these factors can provide with the real reason regarding the adoption of cloud computing by
the SMEs. There are seven factors that can be selected on the basis of this research which can
be considered to be the basis of this study (Wyld, 2009). These seven factors are perceived
cost benefit analysis, relative advantage, support of the top management, competitive
pressure, privacy and security, reliability and perceived risks.

Some of the factors that have been analyzed as per cost benefit analysis involve reduction of
the upfront cost, cost of maintenance, cost effective access to technology, cost of
maintenance etc. These are possible benefits in terms of cost that is present in the use of this
technology. The lack of capital for SMEs is one of the reasons as to why there has been a
possible reason for acceptance of this technology (Alshamaila, Papagiannidis and Li, 2013).
The on demand computing aspects can be considered to be some of the significant features
that are being presented by this type of service.

The relative advantage aspect can be defined as the betterment that is being offered by this
system in comparison to the alternative service method. So in this case the alternative or the
previous method was the use of on premise method one of simple advantage because of the
type of service that is provided by this.

The top management support can be considered as one of the key factors that can be
considered to be of significant advantage in this particular case. The top management and
their support of technology can be considered to be one of the key indicators of the
implementation of technological advancements.

The role of competition in the growth of the company can be considered to be one of the key
contributing factors. The competition is one of the key reasons that business organizations
tend to develop their operation. The development is offered by the cloud computing segment.
The SMEs can be considered to be one of the most competitive markets. Thus there is a need
for development that can be seen in it (Dubey and Wagel, 2007).
The security aspect can also be considered to be a key concern. In this case it can be stated
that authentication and accountability are two factors that are present in cloud computing
services. Thus security is not much of an issue.

The reliability is generated from the uninterrupted service that is received by the businesses
in their operation. The redundancy is reduced by this technology.

The aspect of loss of control can be considered to be one of the key perceived concerns in this
case. The complications and the intricacies of operation can also be considered as one of the
aspects of concern. However it can be stated that cloud computing is not much complicated in
nature. The service provider is a huge aid in this regard (Arora et al., 2013).

Advantages of Cloud based services for Indian SMEs

The Indian small and medium scale industries has in recent time become open to the cloud
based services because of its benefit for this industry segment which faces lot of challenges
because of their size and resource base (Neves et al., 2011). The small and medium scale
industries use the traditional IT Solution for the business process collaboration, business
analytics and business decision making process, having a management control over the
business activity and so on and so forth (Richard, 2011). On the other hand these businesses
also face challenges related to higher cost of operation, challenges of inadequate
infrastructural support and requirement of higher capital investment at the beginning of
business operation (Richard, 2011). These challenges can be effectively solved through
different cloud base solutions. Some of the important solution and benefit to the business
from the cloud based services are lower level of investment required for the IT Solutions ,the
policy of making payment as the business use increases cost effectiveness, lower manpower
requirement and Limited internal infrastructure development ,scalability of the system with
Limited cost and complication ,easy and quick update availability of the software support so
on and so forth (Cruz-Cunha, 2010; Phaphoom et al., 2012; Marston et al., 2011; Gangwar et
al., 2015). Therefore small and medium scale industry businesses could benefit from the
flexibility of use, scope for innovation in the technology; highly customised solution delivery
ability and important quality delivery support for the businesses are some of the most
important advantages for the small and medium scale industry businesses.

Disadvantages of Cloud based services for Indian SMEs

There are also some important disadvantages of the cloud based computing solution which
can be problematic for the business. One of the important concerns of this technology used is
the lower level of security of this system. The cloud based system is used to store information
about different stakeholder of a typical business and any kind of breach of security would
result in serious consequence related to data protection (Catteddu and Hogben, 2009). The
businesses would like to own their data in the cloud computing server to have higher level of
control in their data management (Catteddu and Hogben, 2009). This is one of the important
reasons for lower level of adoption of these beneficial Technologies for the small and
medium scale industry businesses. There are lower level of transparency in the cloud based
services and their solutions which becomes another important concern for these businesses
along with the growing cyber security threat worshipped by them (Sengupta et al., 2011).
These small and medium scale industry businesses generally use Legacy system and old
applications which have not been updated for a long time. Therefore at the time of of
transition from this old Legacy system to the cloud based services the compatibility issue
become a strong factor in this process as most of these applications have very low level of
compatibility with the cloud based system (Heinle and Strebel, 2010; Dargha, 2012). Another
important threat is the server failure at the time of using cloud services. Businesses which are
highly dependent on the cloud with platform for their daily operation would during this server
failure time face total stagnation in their operation (Kim 2009; Leavitt, 2009).

Drivers and Barriers of Cloud Computing

The above understanding of cloud computing advantages for small and medium scale
industry businesses can be further categorised as technical commerce strategic and economic
benefit as a driver for cloud computing services promotion (Zhang et al., 2010). The small
and medium scale businesses have a problem of business activity funding and also have to
manage their internal cost of operation in a meticulous manner to maintain cost advantage in
a highly competitive industry segment. The cloud based services here can provide a strong
economic support to the businesses by providing a scope of achieving lower operational and
capital expenditure for the business operation (Marston et al., 2011). The cost reduction are
the result of lower investment in the hardware and software purchase in a permanent manner ,
lower cost of maintenance, pay per use benefit , no need for licensing and system upgrading
cost. This economic direct benefit has an indirect impact on the business also. For example
the cost reduction in the IT infrastructure and support development can be used for or other
business activity and that is very helpful for a lower financial resource based small and
medium scale business (Marston et al., 2011). On the other hand the ease off modification
and benefit of regular system upgrading helps the businesses to meet the changing customer
requirement in this highly competitive segment of industries. Apart from this system
modifications support the cloud computing solutions provides faster development of new IT
services and its deployment in the business operation as an important technical driver of this
technology (Zhang et al., 2010). This system upgrading and scalability benefit is independent
of the cloud service provider. On the other hand the technical driver of this technology
provides an opportunity to the end user a systemic support at the time of any hardware failure
along with an opportunity to recover data in a disaster situation (Zabalza et al., 2012). The
remote use from any location and the storage of data in multiple locations is an important
technical support that not only improves accessibility of this technology but also provides an
effective data backup for a small and medium scale business. This technology also support in
close data sharing and higher level of business collaboration achievement between the
business management and different stakeholder of the business (Aljabre, 2012). This is an
important business strategic and operational driver of cloud computing adoption process.
Another important business current strategic need is to have a more sustainable operation
with minimum ecological impact. The cloud computing services is an ecologically friendly
system with lower carbon dependent business operation (Marston et al., 2011; Marston et al.,
2011). The cloud computing service providers are using large scale infrastructure for their
data centre management and Service Delivery process which provides the higher economy of
scale in their operation and subsequently efficient use of electricity for this process (Armbrust
et al., 2010). This scale advantage is not only cost efficient but also contributes to lower
emission. The small and medium scale businesses have serious shortage of quality human
resource and there is cloud service solution helps those businesses to have lower human
resource dependency and greater operational efficiency (Zhang et al., 2010).

The barrier faced by small and medium scale businesses in the process of cloud computing
solution adoption process are having organisational , policy and Technical nature (Catteddu,
2009) . One of the studies done on different business and the question of cloud computing
adoption process has revealed that around 75% of the respondent who are the top level
manager of those businesses, are highly concerned about the security aspect and they feel this
is the most significant technical barrier of this technology adoption (Marston et al., 2011).
This study has also revealed that lower level of control on the cloud computing service
provider’s infrastructure makes the business vulnerable to Cyber attack and other type of data
security violation. On the other hand policy barrier for this technology adoption can be
understood from the lack of compliance and service standard codification at the global level
because of its emerging Technology status (Vaquero et al., 2008). One of the issues that is
face by many businesses in their Cloud Service addiction process is the difficulty to integrate
their existing way of business processing and also to shift their Cloud Computing operation
two other vendor of choice (Vaquero et al., 2008). This issue is also a resulting factor of
lower policy and standardization across the cloud computing services industry. The
organisational barrier is also coming from this in flexibility of moving from one vendor to
another vendor or to shift their existing data to a new cloud computing system (Armbrust et
al., 2010). One of the important supports for the organisation in this regard would have been
a greater homogenisation of service standard achievement and is off data transfer provision
development. For the developing countries internet infrastructure and lower bandwidth is a
significant technical barrier for this services adoption as there is always a chance of slower
internet connection leading to inappropriate access and frequent service interruption (Veigas
et al., 2012).

Factors In Favour For Adoption Of Cloud Computing

The financial, economic and operational benefit of cloud computing system application for a
small and medium scale business has provided good scope for growth of these services
among the Indian small and medium scale businesses. Software as a service or SAS in short
has higher growth opportunity has these services through the cloud computing Technology
not only has an existing small and medium scale business but is also highly useful for a
entrepreneur starting their business in this highly competitive segment of the industry
(Sharma, 2009). Some of the report had projected that this important segment of software as a
service is likely to glow grow by 17% CAGR rate in India to reach 60 million dollar within
2007 to 2011 time period (Rawal, 2011). This assessment also showed that during that time
India used to have 30 million businesses in the small and medium scale sector and their
primary need were the Expendables, trustworthy and user-friendly application for their
business process management. The safety and assurance from the Cloud Service Provider
where considered to be highly valuable at the time of investment decision making in this
direction. Some of the studies during that time also depicted that business customers were
considering this new technology as part of their greatest strategy and Critical information
system architecture of the business (Rawal, 2011). The prediction at the time was that Indian
market of cloud services would reach 1084 million dollar by the end of 2015 with 10 fold
growth within the 5 years time period (Rawal, 2011). In case of Indian small and medium
scale industries the important advantage or driver of this technology adoption as assessed
during that period it was because of the lack of Management bandwidth for Rapid growth and
Information Technology infrastructure management, lack of budget and scope for
improvement in business activity (Rawal, 2011). The market research done during that time
hinted that the Healthcare sector along with the retail businesses is going to be largest
consumer of these services. Assessment were not only based only on the positivity or the
advantage of this emerging Technology but also taken into consideration the need for or
better architecture, design , implementation of large frameworks and development in this
field (Rawal, 2011). One of the important services in the export segment for the Indian small
and medium scale industry where's the service outsourcing businesses. One of the
assessments done during that time by the national Outsourcing Association had shown that
during the two years’ time period ending in 2012 this industry would witness a doubling of
cloud computing services at option (Rawal, 2011). The survey done by this organisation also
found out that cost reduction is an important reason for 82% of the respondent from this
industry segment whereas 62% and 52% respondent stated the system updating and
scalability as one of the important reason for this transition in their organisation (Rawal,
2011).

Some other study done by the national Outsourcing Association in India had included diverse
industrial sectors like retail, manufacturing, financial, media, Telecom and different
government bodies (Rawal, 2011). The studies had shown that most of the respondent from
different industrial sector agreed that the use of cloud computing services is more relevant for
the production oriented business activity rather than in the development oriented business
activity. This study also reveal that most of the businesses from different sectors are more
interested in a hybrid system of cloud environment where both cloud and in-house system
can be merged to have unified system that best suits their business need (Rawal, 2011). Some
other Technology experts has opined that the partnership working approach and the need for
efficient conversation in the business task management can be supported by the adoption of
cloud based services (Rawal, 2011).

Major benefits of Cloud-ERP

Indu Saini (2012) has studied and discussed the Enterprise resource planning system for the
small and medium scale businesses and how the cloud computing services can assist to
provide a better solution for this core business requirement. The study stated that the
complicated ERP system now can be better managed like an experience company in the
Information Technology Sector by the support provided by the cloud computing service
providers because of ease of installation and maintenance. Therefore the cloud computing
services would be able to not only reduce the quality human resource needed for this kind of
system management but also the cost of information Technology system asset creation.
Another study done by Sapna Shukla (2012) related to this ERP system development based
on the software as a service solution approach revealed that the hassle free operation at lower
cost , 24x7 access and within very short span of time the system development capability are
some of the important benefit for this small and medium scale businesses. This study also
emphasized that manufacturing or production businesses in the small and medium scale
sector would best benefit from the ERP system deliver through the cloud services. Study
done by Raihana (2012) has show that the use of cloud based ERP system for the business
operation not only is cost effective but is also highly beneficial in terms of experience, first
and simpler work delivery. This kind of system is also highly useful to fight a strong
competitive challenge and other business internal specific challenges. Another study done by
Okezie et al (2012) has focused on the use of cloud Computing based ERP system
application and the integration with the organisational model which is basically a approach of
investigating implementation Framework for the cloud computing services with relation to
ERP system. The study had revealed that the cost advantage, moderate level of performance,
Rapid deployment and scalability are some of the important benefit for the small and medium
scale businesses. Some of the researchers also have shown that the management of large
database is highly supported by the cloud computing process with greater efficiency delivery
and reduction in cost of computation (Mudge, 2010). This process is achieved through task
segmentation and parallel processing capability. This important benefit makes the cloud
computing a highly desirable service for the businesses as well as the researcher and
government organisations.

The technology adoption and transition into a new system is influenced by necessary and
sufficient conditions of doing so for a given business (Jain and Sharma, 2016). The necessary
conditions are the factors that influence the business organisation to move to a more efficient
or different system based operation where as the sufficient conditions are the supporting
factors in this decision making. Therefore understanding these factors would be helpful to
understand when the advantageous would meet the necessary and sufficient condition for a
given business to transit to cloud based services. The increase in agility for the ERP system
when implemented using the cloud computing Technology is an important motivating factor
for the businesses what the adoption of this technology (Jain and Sharma, 2016). The
development of business software is an important revenue source for different software
companies. The continuous development happening in the cloud computing Technology
would be advantages for the business users and that would in turn impact the software
making companies to develop and deploy software products to this business client in coming
future (Petra Schubert, 2011). Therefore the advantage situation of cloud computing the
services would increase adoption of this technology solutions for business activities and also
influence the service provider to evolve their services that would not only deliver the
important benefits but would also be able to mitigate the risk perceived by the business to
adopt these services.

Manufacturing and services sector’s advantage and disadvantage perception

There are different risk and gains that has already been discussed in the earlier sector of this
analysis. One of the important studies done by Iyer et al (2013) has thrown some light on the
understanding of risk perception of the cloud computing services by the two different sector
of the larger economy. This analysis and understanding is true for the large and also SME
sector business. In this study the research has considered four core gain or the advantages for
the business to adopt the cloud computing services. One is the CAPEX gain which is the
benefits that the business gains in the way of deferring investment, lower leverage position
and higher delivery of NPV. On the other hand the OPEX gain is related to gains that
businesses have from lower level of maintenance, required lower resource and possibility of
lower cash outflow from the system. The technology gain is understood as the higher level
integration possibility, scope for innovation and greater speed of delivery (Iyer et al., 2013).
Last the convenience gain is the mobility, flexibility and scalability benefit that the business
gains by using the cloud computing services, as discussed in the above section.

The researchers have also identified four key risks or the disadvantage as the key barrier for
the adoption of cloud computing services. The first risk is the vendor risk where the lack of
continuity and investigation, and sharing of reputation fate are the important concerns for the
business. The security risk is the second risk which has already been discussed as those
primly related to the data audit ability, confidentiality and security aspect related to cloud
computing services (Iyer et al., 2013). The no gain risk is a new disadvantage that is
perceived by the business and has not been discussed in the earlier section. Here the business
perceived the no gains in terms of CAPEX and OPEX benefit as they consider this cloud
computing services as a short term benefiting activity (Iyer et al., 2013). The last risk in this
study is the efficiency risk as the cloud computing services and their system may sometime
cause the bottleneck for the data transfer, latency and downtime problem for the business.

The study was actually done by taking a sample size of 50 business from the from the SME
sector which are from both the manufacturing and the services sector (Iyer et al., 2013). The
results show that the CAPEX and the OPEX are the two most important gains that the
business across the sector is choosing. On the other hand the data security and vendor related
risk related to cloud computing services has been perceived the most important barrier for the
adoption for these businesses. These results show a uniformity of identification of risk by for
the manufacturing and the services sector in the SEME business. But there are finer details
that need to be considered at the time of analysis the risk and gain perception in a
comparative manner for both the business sectors. There is intensity different between their
risk and gain perception related to cloud computing services. The gain perception of the two
most important gain considering factor identified earlier shows that the gain perception of the
services sectors is higher than the manufacturing sector by around 3.5 percentage point (Iyer
et al., 2013). The most important different comes to the risks perception. Here the services
sector is perceiv9ing the two of the most important risk by a 12 percentage point higher than
the manufacturing sector (Iyer et al., 2013). This significant different in perception can be
understood from one aspect of business operation. The cloud computing services operates
through the storage disk, computers, and data card, networking interface and memory spaces
as their products but underneath the cloud computing services is basically a service provider.
Therefore the services sector understands the operational approach and there they perceive
the risk at much higher level. The services sector understands the risk of subjectivity,
intangibility, heterogeneity, continuity and so on. These risk factors are more pronounced for
the products that are standardised. Therefore the from that understanding they are able to
related to the risk factor more in a more realistic sense of it (Iyer et al., 2013). Thus
advantage and disadvantage and future adoption of this cloud computing services among the
SME business would be dependent on the realistic risk perceptions by different business
sectors.

Management Support for Cloud Computing, Hypotheses Test result

The need for managerial support within the IT infrastructure implementation is necessary for
a wide number of perspectives. The IT since 1990s is more of strategic resource and less of a
support means for running the organisation. Moreover, rise within international competition,
restructuring the organisational requirements, advancing technological options, and
requirement for better technology sophisticated options are necessary for the rise of
managerial support for its implementation (Amini, Bakri, Sadat Safavi, Javadinia, & Tolooei,
2014). Moreover these IT systems are changing worldwide, and improving the coordination,
communication and the control systems, this is more necessary for acceptance from
managerial levels. The need for the companies is to make use of IT technology as a
sophisticated weapon for the competitive advantages, and bringing effective leadership
within the workplace, and implementing new IT mechanisms for the company (Applegate &
Elam, 1991). Most of the management companies are also increasing redesign of the IT
infrastructure, and increasing their overall competitive position within the company, and
through this the trend of downsizing the organisations and laying off unnecessary employee
strengths are being fulfilled. Hence, these IT teams and technology within the company wants
more accessibility of cross functional teams which work in sync with each other, and come
together for delivering specific projects within the company. IT and innovation have a special
role in this perspective (Amini, Bakri, Sadat Safavi, Javadinia, & Tolooei, 2014). The
increasing expenses and the higher costs from the various intermediary services, along with
various risks, often reduces the need for the managers to adopt the IT innovations within their
companies due to lesser payoffs (Freiser, 1992).

One of the major critical factors of success within the top management support among the
enterprise literature begins from the manager’s viewpoints of developing technology within
organisations. The organisational resources must be critically be designed and allocated by
the management optimally, and hence these helps in building more strategic partnerships
among the different areas of the research. One of the most important factors for adoption of
technology and innovation within organisations as per the existing literary works are the
support gathered from management, within the enterprise implementation systems (Amini et
al., 2014). The management support is one of the most critical need for the organisation to
implement the technology as without management will, such technology adoption, change
management and leadership changes is not possible. Information system literature also
mentions the need for the managerial support in order to implement the technology aspects
within the businesses. Most of the manager behaviour traits which require the adoption of
new technology for the businesses include being a vision setter, being an analyser, a
motivator ad being a task master.

The main role of the motivators is to transform the organisational vision into a cause, and this
cause is essential to fight for, in gaining organisational competitive advantage. Hence, the
managers to develop motivation must develop a sense of excitement, within the firm, so as to
motivate, and also improve the goals of the employees (Amini et al., 2014). Within the role of
the analyser, the manager makes the entire internal operations and processes more efficient,
and thereby plans so to develop the internal efficiency. The top manager helps in setting the
context of the need for change, makes all the decisions needed to make operations more
efficient, and controls the overall processes within the management of the organisation. The
role of the task master is more efficient, and the firm’s responsibilities and the performance
are enhanced. The economic performance is needed as per the demand of the market in order
to improve the overall company processes. This also helps in increasing responsibility and the
social performance of the organisation. The decisions need to be influenced both from the
lower levels to the upper level of the organisation, and also makes all the tradeoffs generally
explicit to allocate optimal resources within right time and right place. In cloud computing
adoption within the organisational capacity, role of the manager is highly important (Amini et
al., 2014). This involves the optimal allocation of resources, re-engineering all the processes
within the organisation, integrating all services and developing the organisation in order to
achieve their strategic objectives. IT is a system which is essentially used in different
allocations and in various activities within organisations, and helps in improvising the role of
manager, making performances better and achieving strategic goals of the businesses (Amini
et al., 2014).

Top management support

Top management support includes the need for the decision making by the upper
management their involvement, their motivation capacity, and encouragement which is
needed for the adoption of cloud computing or other related IT infrastructure in making the
business model more technologically acclaimed (Kumar, Samalia, & Verma, 2017). The role
of the top management is not just accepting the new technology integration but also; develop
the change management within the organisation. Driving change and making employees
accept the changes within the organisation. The top management needs to understand the
relevance and the need for adopting cloud computing and relevant IT technology, so that the
top management adopts innovating and supports integration of technology for the whole
business. This can be done if the organisation has necessary feedback from the IT think-tank
of the business, which claims the need for integrating IT for the overall development of the
business in adopting various innovation and technology in order to make the work more
efficient and more valuable (Kumar, Samalia, & Verma, 2017). For information technology
adoption within organisations and SMEs the support form top management is highly crucial
factor and the manager needs to be visionary, a change leader, motivator and adopter in order
to drive the competitive advantage of the business. For adoption of cloud computing
necessary resources needs to be developed and adopted by the company in order to develop
the cloud computing within the organisational system. It is one of the most important positive
factors which enhances speedy adoption of the technology and also enables employees accept
the change through proper support and change initiatives. Hence, in order for the SMEs to
adopt cloud computing the management needs to understand the need for the change from
conventional ERP into the cloud ERP system, their plausible benefits and generate own risk
management plan for tackling all the services (Kumar, Samalia, & Verma, 2017).

4 decision variables on the potential SME cloud adopter, Analysis and

Interpretation
There is a hierarchical association among 4 different variables which impacts the adoption of
the cloud computing by the SMEs. For the one-on-one basis all the gains and the risk need to
be analysed before setting the cloud computing system (Iyer, Pandey, Lamba, & Panda,
2013). However, the buyer decision gets affected when potential forces from the markets
determine the trade-off between the gains and the risks of adopting cloud computing
technology. Hence the ex-ante decision variables for buying cloud computing within the
SME is a huge decision governed by 4 or more variables as per the need of the cloud (Iyer,
Pandey, Lamba, & Panda, 2013). The worth achieved from each of the gains is compared and
provided a hierarchical appeal, and this the SME market perceives against trade-off from the
gains. The major gains associated with the SME adoption of cloud computing includes cost-
savings gain, communication with market, technology gains, and also including convenience,
as major factors for the gains within the market. In spite of these various gain, there are
various risks which reduce the ability to adopt the technology for the SMEs. As SME sector
has reduced profit and cash flows, the costs can be reduced by adopting the cloud computing
technology in order to reduce the losses and operating expenses (Iyer, Pandey, Lamba, &
Panda, 2013). The communicability with the market is also enhanced through the cloud
computing and this also improves the market share, trust with the customers. All these
perspectives reduce the capital expenses of the company as well.

Computing and technology are other cost factors that are mostly developed through proper
adoption of technology, and improving the utility of the services. Moreover based on the last
factor convenience, time, place and system accessibility can also be developed, that helps in
making the data and information sensitive to be secured and kept updated (Iyer, Pandey,
Lamba, & Panda, 2013). The major risks which influence the application and adoption of the
cloud computing within the businesses include vendor related insecurity, which majorly
dominates the SME market, as there are multiple vendors of the cloud and often finding the
right vendor gets problematic. The ambiguity of who the actual vendor is disrupts the trust
and adoption for the small buyer and early adopters. The vendor provides cloud accessibility
at hardware and store terms. There are also vendors who package all the cloud application
within the ERP and the CRM system, with hardware adoption (Iyer, Pandey, Lamba, &
Panda, 2013). The SaaS provider often provides the user with the amalgamation of these two
things together. Hence, escalation of trouble and who is the actual vendor increases the
ambiguity. These have increased the risk towards vendor ambiguousness being the major
risk. The value of trouble shooting and the needs by the SME is also needed, and the correct
identification of a feedback path, leads to adoption related problems, that is another risk
associated with vendor risks. Moreover risks also pertain to breach in data security and
information, which increases more losses for the organisation as a whole. Once the
technology s adopted efficiency becomes the third most perceived risk, only after the cloud
has been adopted by the user. Latency issues, transfer of data issues and the capex/ opex
gains are balanced by the risks from these three problems (Iyer, Pandey, Lamba, & Panda,
2013). However, if the SMEs are either for manufacturing and service orientation there exists
certain comparative elements. Both of these sectors have similar gains pertaining from Capex
and Opex, but the difference in risks pertain to their perception of gain and their perception of
risks. As cloud computing is the services underlying all the connectivity among computer,
data centre, storage, memory, and networking; the switch from traditional to cloud
technology becomes highly sceptical. Service sectors mostly have perceptions of intangible
risks like heterogeneity, continuity, intangibility, subjectivity and in standardising the
products. Hence, the risks for service SMEs are higher as cloud connects all services together
(Iyer, Pandey, Lamba, & Panda, 2013).

Hence from this it can be said that there are both pros and cons in adopting the cloud
computing technology within the SMEs sector both in manufacturing and service sectors.
However as per the various benefits and as per the various disadvantages as mentioned, the
potential risks mark a high influence in all the cloud computing arrangement and adoption.
The cloud computing has various benefits, and the organisation needs to understand the
suitability of the technology with its own organisational structure and the organisational
requirement, and understand the perceived benefits which might increase once the cloud is
adopted (Iyer, Pandey, Lamba, & Panda, 2013). Helping the SMEs decide the possibly best
cloud vendor, accessing the right service points, developing security backup, and designing
the various core service offerings are essential for the company. The gains are more within
the product positioning and less within the product creation. The major acceptance of SME
cloud adoption is the integration of the cloud system with the ERP and CRM system, which
helps in implementing the cloud technology by assuaging all the potential benefits and the
risks. Hence, the major decision variables depend on the risks. SMEs need to develop proper
counteractive risk mapping and risk management plans, to accommodate the cloud
operations, and improve the cloud technology adoption through managerial support (Iyer,
Pandey, Lamba, & Panda, 2013). Developing an IT think-tank is also essential in order to
map the risks, reduce any form of problems and increase the cloud adoption within the
organisation.

The Future of Cloud based services

The future prospect of the services delivered by the cloud computing businesses is showing
high growth prospect. One of the studies done on the Indian BPO and IT vendor shows that
the SMAC strategy which means social media mobility analytics and cloud based services
can help the businesses in the sector to cross 225 billion dollar by the end of 2020 financial
year (Gide and Sandu, 2015). The main benefit of the strategy would be to store multi
structured large volume of data in the cloud based systems and have the ability to access
those data in a mobile manner (Gide and Sandu, 2015). This kind of development would help
in faster expansion of these industries in the s m e segment of industry. This growth of the
industry specific to this strategic approach can be understood from a comparative data of
2012 and prospect of 2020 as discuss in some research paper. The SMAC strategy in the
2012 contributed around 20% of the total spending of different industry related to ICT (Gide
and Sandu, 2015). But these spending was estimated at that time to grow by 6 fold to reach
around 80% of the total ICT spending by the end of 2020 (Gide and Sandu, 2015). Therefore
the cloud based computing and Analytics along with the social media related investment has
a great future in India. One of the important trend in recent time that has been witnessed in
the internet related world it was the first growth of social media across the world. A similar
situation has also been witnessed in India where the faster growth rate of mobile devices and
gradual growth of internet penetration resulted in Foster growth in social media use. This use
of social media by the businesses and also by the individual consumer would be the important
supporting factor for the cloud based services growth in India. The analytical support
provided by the cloud based services will be highly useful for the small and medium scale
Enterprises to not only handle large data volume but would also critically analyse those date
easily and effectively. The estimation of the telecommunication industry was that the
Smartphone based mobile internet user growth in India would weakness a growth form. 4.1
million to 164.8 million during the six year time period ending 2015 (Gide and Sandu, 2015).
The 2015 data shows that there are around 900 million users of mobile subscriber who is
provide and healthy base for the cloud computing based services growth. Later India was
planning to implement the 3G and also 4G networks across the country and this development
it is going to be one of the important sources of mobile phone base internet use growth in
India (Gide and Sandu, 2015). These growth figures are some of the important statistics that
can support the prospect of higher cloud based services growth in India. In case of direct
cloud based services faster growth related to the small and medium scale businesses , the
cloud based service provider need to assess the specific need of the small and medium scale
businesses to satisfy them (Gide and Sandu, 2015).

SME sector & cloud

A separate study done by Iyer et al (2013) shows that small and medium scale industry
sector perceives the vendor related risk as the highest barrier for adoption followed by the
security risk , efficiency risk and no gain risk. In that study it has been argued that this
specific risk is the important barriers of adoption for this small and medium scale business in
India. Therefore in that study it has been suggested that the cloud computing services must
understand these inherent resistance in the small and medium scale businesses to adopt the
cloud computing services. A specific strategic approach and amendment in their current way
of Service Delivery to eradicate these inherent barriers of decision making of the small and
medium scale businesses would be an important step towards faster growth in India in this
business segment.

Managerial and research implications

The bright future of cloud computing services in Indian small and medium scale businesses is
driven by different factors which are influencing the management of these businesses
organisations to adopt cloud based services for their business process management. The
benefit of using Cloud Computing services had a good perception among the management of
these businesses along with that the competitive pressure also plays an important role of
influencing Cloud Computing services adoption (Babu and Chakravarty, 2014). Some of the
important service area growth that were estimated in a study by Babu and Chakravarty (2014)
shows that the website hosting, ability to store large volume of data, cloud based ERP, billing
and accounting services, web analytics and applications are some of the most important
services that would help the projected faster growth of cloud based services among their
Indian small and medium scale businesses. An important study regarding the cloud based
services adoption in case of Indian small and medium scale businesses shows that the
intention to adopt cloud services is having a 73% variance (Kumar et al., 2017). That means
there is a wider variance among the small and medium scale businesses in India in case of the
cloud based computing services adoption decision. This data shows the diversity existing
among the businesses and also point out the fact that there is a in depth understanding is
required to be developed by the cloud based computing services regarding different type of
businesses in the wider small and medium scale industry segment. This understanding would
help them better Strategies and formulate tactical marketing planning to sell their services to
wider variety of small and medium scale businesses for achieving higher growth in this
market.

Applications of Cloud Computing

There are other research teachers pointing out different types of need possessed by the
businesses in adopting the cloud based computing services. Customer relationship
management , enterprise resource planning , web applications and Database Management
applications are some of the most important service area for the cloud based computing
businesses to avail these high growth opportunity in the Indian market (Rawal, 2011). The
study also shows that the least prefer services from the cloud computing businesses are the
finance and human resource management related service support of any business
organisations (Rawal, 2011). Considering these preferences and inhibition the cloud based
computing service businesses need to develop their products and services to achieve higher
growth potential in the Indian market.

Management support for high growth

The information system in the decade of 1990 has seen perception change among the top
management of any business organisation. The earlier view of the management was to use the
information technology system as the support mechanism for the greater business but that
later changed and top management of any business organisations begin to see information
system as an important strategic resource for the organisation (Applegate and Elam, 1992).
The globalisation process influence the speed of global businesses and that in a way
influenced the Global Business competition, faster advancement and spread of Technology
former development of sophisticated Communication Technology and also restructures
Organisation was system; improve control system and coordination within the business.
These changes in business external and internal environment were influencing for the top
management to consider the information system as an important strategic weapon (Applegate
and Elam, 1992). The change in global competitive environment forced different size
businesses to become more efficient for maintaining a sustainable operation. One of the
important approaches in this regard was to reduce employer number and do more with less
kind of approach. During this time it also so was recognised that a cross-functional
development of team and working approach within the organisation would be highly
important to manage the competitive challenges in the market. In these processes Information
Technology systems played an important role during that transition phase as the top
management of a business organisation understood the importance of information system and
invested to build these critical infrastructures for the business organisation (Amini et al.,
2014). This historical information are pointing out that any kind of Technology shaped within
any industry or business organisation has an importance support need from the top
management of the organisation. It is also important that the top management also understand
the critical challenges faced by the organisation and how those could be better address using
Technological Solutions. At present the move to adoption of Cloud Computing based
services would also need similar type of top management support to see a massive
transformation in the weather businesses manage their processes. There are literatures as
cited in the above discussion shows that the top management understands the benefit delivers
by the cloud computing businesses in relation to market competition management, business
efficiency improvement, higher performance and productivity delivery and so on and so
forth. Therefore it can be predicted that a similar wave of industry-wide transformation and
faster adoption of cloud based computing services especially in the small and medium scale
enterprises in India would be an important change.

Conclusion
As per the research conducted by Fox et al., (2009) various IT services are offered by the
cloud technology for the clients as a form of utility, enhancing efficiency for operations in
multitude products and services. The hardware and infrastructure is consisted within cloud
and the third party host for these applications and hardware makes it easier to access and use,
making it convenient on demand service. As per Mell &Grance, (2011) by using cloud more
focus can be provided to daily activities and core businesses, instead of spending much time
on consumers. Moreover, as they are operated through third party vendors, software licenses,
hardware installations, software updates, hardware repairs, and installations can be made
easily and the effect is percolated among the user’s activities, making it more simplified and
easier. The adoption of such services is cost benefit task and hence, through cost benefit
analysis the activities may be done, to gain maximum benefits and in adopting the various
services (Brynjolfsson, Hofmann, & Jordan, 2010). It is not a product yet it increases
efficiency of other products through its utility, improves capacity, increases competency,
without adding more expenses through recruitment and training, or investing in something
new, these helps in investing new software, and pay per use basis, which suits the needs of
the SMEs. As SMEs do not have huge investment in software or hardware, cloud services
might be suitable and less costly for Indian SMEs (Bhat, 2013).

There are extensive literature which support that different risks arrive for the cloud
computing like vendor related risks, cost reduction risks, data security risks, and system
efficiency risks that need to be mitigated (Ambrust et al., 2010). Cloud computing being a
symbiotic application, couples over the internet and allows in ease of functioning by
accessing hardware and software, to provide efficient services. The paper by Iyer, Krishnan,
Sareen, & Panda (2013), delineates that cloud computing has multiple benefits while using
the SaaS provider. The IT and the power are more shifting towards the external users and
providers, and through this paper, suggest various core and noncore strategic decisions, for IT
ownership. The specific risks pertaining to cloud computing have been provided by these
papers. There have been researches by Jeanne, (2012) suggesting that the banking and
security sector has also started adopting cloud slowly, and handling financial data through
regulations management and contract management can be done. The real and perception risks
of using cloud computing in various sectors and industries have also been formulated by
researches of (Brohi, & Bamiah, 2011).

Barriers to cloud computing have also been provided, and the challenges and benefits within
cloud paradigm have been noted down. Hitech industry firms in cloud adoption have also
been investigated by (Low, Chen, & Wu, 2011). The journey of cloud from technology to
usability and implementation has been provided. The drivers of cloud computing within
Indian SMEs have been provided by (Iyer, Tilak, Narayanaswamy, & Panda, 2012).
Education sectors and its implementation of cloud, benefits and increasing efficiency has
been highlighted here Vujin, (2011), and use of cloud for fostering research academic work
and various educational purposes have been touted.

The future of cloud in banking sectors has been provided by Alec, (2010), and the regulation
of data, recovery of data, innovation, customer trust, within banking and cloud computing
have been researched. Healthcare sector has been provided by Chatman, (2010) focuses on
data security and the efficiency among different departs through cloud. The fractural adoption
of cloud and the insights about using cloud net present value has been provided by and the
various risks for using cloud pertaining to security, redundancy, variability, contract reach,
privacy and downtime has been mapped mathematically for understanding risks(Iyer,
Krishnan, Sareen, & Panda, 2013).

From the multiple studies of the cloud computing within SMEs it has been therefore
concluded that the awareness and implementation drive for SMEs in India, still needs to be
developed as most of the SMEs are early majority waiting for referrals from the early
adopters, which includes the larger firms and businesses. Although the benefits of the cloud
computing are known, there are practical implementation challenges and various risks which
has been provided within the review (Sharma et al., 2010). Many papers and past researchers
have developed four major risks including risk from vendors, cost, security and
implementation efficiency risks. These needs to be encountered through proper risk
management plans. However, as SMEs work on low budget, reducing these risks and
improving current conditions tends to be a barrier for the new entrants, who focus mostly on
exciting instead of growing. In face of global economic, social, technological growth and
barriers, the SMEs need to enhance cloud computing, but these needs enough time, money
and security for the cloud computing to be adopted fully. The companies need to find
solution.

In India the government has started the digitalisation drive and the country is moving toward
the use of internet operation in every household (Das & Das, 2012). For this, the companies
are gaining traction and encouragement from government entities and IT think tanks on
developing cloud technology and adoption such communication channels for improving
customer services and profitability. The proper financial structures and loans disbursal
windows are being offered at low interest for SMEs to started adopting cloud within their
organisation. However even through external pressure might improve decisions to implement
cloud, the need for internal competency should be developed for adopting cloud. Proper
training, skilled labour, technology enhance, risk management must be done for companies to
increases adoption of cloud (Achimugu, Oluwagbemi, Oluwaranti, & Afolabi, 2009).
Moreover, cloud can also be adopted to increase business potential through proper change
management and visionary leadership which the SMEs must improve. The future of cloud
technology and computing is enhancing and the companies must stick to the encouragement
from government initiatives for proper adoption of cloud. Risks should eb taken through
calculation and proper management planning and contingency planning made in order to
diver the risks from the company to increase the efficiency of the cloud adoption and
technology.
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