Information & Management 51 (2014) 497–510

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Information & Management

journal homepage: www.elsevier.com/locate/im

Assessing the determinants of cloud computing adoption: An analysis

of the manufacturing and services sectors
Tiago Oliveira a,*, Manoj Thomas b, Mariana Espadanal a
a
ISEGI, Universidade Nova de Lisboa, 1070-312 Lisbon, Portugal
b
School of Business, Virginia Commonwealth University, 301 W. Main Street, Richmond, VA 23284-4000, USA

A R T I C L E I N F O A B S T R A C T

Article history: Many factors influence the adoption of cloud computing. Organizations must systematically evaluate
Received 29 January 2013 these factors before deciding to adopt cloud-based solutions. To assess the determinants that influence
Received in revised form 26 March 2014 the adoption of cloud computing, we develop a research model based on the innovation characteristics
Accepted 29 March 2014
from the diffusion of innovation (DOI) theory and the technology-organization-environment (TOE)
Available online 6 April 2014
framework. Data collected from 369 firms in Portugal are used to test the related hypotheses. The study
also investigates the determinants of cloud-computing adoption in the manufacturing and services
Keywords:
sectors.
Cloud computing
ß 2014 Elsevier B.V. All rights reserved.
IT adoption
Diffusion of innovation (DOI)
Technology-organization-environment
(TOE)

1. Introduction include small and medium enterprises (SME) in supply chain-

Large and small enterprises are rapidly reorienting their overall
information technology (IT) strategies to include cloud computing.
As the strategic emphasis on flexibility, innovation, and economic
gains increases, organizations can no longer overlook the
advantages of the computational agility and scalability provided
by a distributed cloud-computing environment [5,36,16]. With the
potential to transform business processes, lower IT expenditures,
deliver real-time applications, offer access to ubiquitous storage,
unlimited computing power, and market information mobiliza-
tion, organizations look to cloud-based solutions to achieve
business efficiencies [16,65,100,6,37]. Thus, companies are seri-
ously considering increasing IT expenditures on cloud computing
[30].
Despite the touted advantages of this new technology, evidence
suggests that not all companies are rushing to adopt cloud-based
solutions [1,105]. Among the reasons are that it is a disruptive
technology that has not reached a level of maturity; the lack of
industry-specific conformity to standards; and a high level of
related risk and costs [9,12,70]. In addition, firms in certain sectors
may have only a modest investment in technology. Examples
* Corresponding author. Tel.: +351 914 934 438.
E-mail addresses: toliveira@isegi.unl.pt (T. Oliveira), mthomas@vcu.edu
(M. Thomas), mariana.espadanal@gmail.com (M. Espadanal).
centric industries such as manufacturing, agriculture, and con-
struction [1]. They have limited technical capabilities and often
rely on smaller groups of IT professionals or contract IT staff for
their IT needs. The reluctance to adopt cloud computing solutions,
a disruptive technology in the ‘‘technology trigger’’ or the ‘‘inflated
expectations’’ phase of the hype-cycle [30,38], are therefore real
and noteworthy.
Clearly, the cloud phenomenon is not a panacea for all
organizations. The purpose of this study is to understand the
determinants of the adoption of cloud computing and its relative
advantage to organizations. Most earlier studies on cloud
computing have focused on technical and operational issues
[119]. A few studies have addressed the adoption of cloud
computing from an organizational perspective (see Table 1),
mostly assessing the direct effects of the innovation characteristics
or the contextual factors. No study has conducted a holistic
evaluation of the direct effects and the indirect effects of the
determinants on cloud-computing adoption. Motivated by these
issues, this study seeks to develop a research model that integrates
the innovation characteristics [91] of cloud computing and the
technology-organization-environment (TOE) perspectives [104]
that underlie its adoption. The contribution of the article is
twofold. First, to investigate the direct and indirect effects of the
innovation characteristics and the TOE contexts on the adoption of
cloud computing, data from 369 firms in Portugal are used to
evaluate the research model. This study therefore presents a more

http://dx.doi.org/10.1016/j.im.2014.03.006
0378-7206/ß 2014 Elsevier B.V. All rights reserved.
498 T. Oliveira et al. / Information & Management 51 (2014) 497–510

Table 1
Cloud computing studies published in peer reviewed journals.

IT adoption Adoption theory Constructs/factors (independent variables) Methods Data and context Author
(dependent
variable)

Cloud computing TOE and DOI Technology (relative advantage, complexity, Factor analysis E-mail survey of 111 firms [65]
compatibility), organization (top (FA), logistic belonging to the high-tech
management support, firm size, technology regression industry
readiness) and environment (competitive
pressure, trading partner pressure)
Cloud computing TOE Technology (relative advantage, complexity, Conceptual Conceptual model [1]
compatibility), organization (top
management support, firm size, technology
readiness), and environment (competitive
pressure, trading partner pressure)
Cloud computing IPV and DOI Business process complexity, Confirmatory factor E-mail survey of 289 firms in [117]
entrepreneurial culture, compatibility, analysis, multiple manufacturing and retail
application functionality regression analysis
Intention to adopt TOE Adopter’s style as moderator of: perceived Partial least Using secondary data [82]
cloud computing technology barriers, perceived environment squares (PLS)
barriers, perceived benefits
Cloud computing DOI Relative advantage, compatibility, Semi-structured 19 IT professionals, Taiwan [60]
complexity, trialability, observability qualitative
interview
Cloud adoption – Barriers and benefits Qualitative and Survey of 94 SMEs in Spain [106]
quantitative
methodology
– Institutional theory Regulative, normative, cognitive Conceptual – [54]

Note: Diffusion of innovation (DOI); technology-organization-environment (TOE); information processing view (IPV).

holistic assessment of the determinants of cloud-computing
adoption than earlier studies. Second, by investigating the
determinants of cloud adoption in two sectors (manufacturing
and services), we contribute to the wider body of scientific
knowledge that has so far not studied the adoption of cloud
computing in these two sectors. Our study highlights the
importance of systematically evaluating the determinants of cloud
computing at the industry level.
Through a review of the literature, we provide background on
cloud computing and related research. We then describe the
theoretical foundations for the research model and propose the
hypotheses. The research methodology and the results are
presented, followed by a discussion of the major findings. We
conclude by highlighting the implications of the findings and
summarizing options for future study.
2. Background
2.1. Cloud computing
There is no universal or standard definition of cloud computing
[100,35,40,120,71], even though it is not a completely new
concept. Cloud computing evolved through the recent advance-
ments in hardware, virtualization technology, distributed com-
puting, and service delivery over the Internet. The ‘‘cloud’’
metaphor is a reference to the ubiquitous availability and
accessibility of computing resources via Internet technologies
[100,109]. Cloud-based solutions give businesses and users easy
access to massive computing power at negligible costs [116]. By
moving IT functions such as storage, business applications, and
services to the cloud, organizations can potentially reduce the
overall cost of IT [71,41,98]. Cloud computing thus offers monetary
benefits that businesses can no longer ignore.
Generally speaking, services offered by cloud computing can be
classified into three types [18]. In Infrastructure as a Service (IaaS),
the basic units of computing power and storage are cloud-based
and available on demand (e.g., Amazon Elastic Compute Cloud
(EC2), Rackspace, Amazon Simple Storage Service (S3), and
GoGrid). The benefits of this model include pay-per-use and
resource elasticity to match the computing demands [103]. In
Platform as a Service (PaaS), the service provider offers an
integrated solution stack for creating and deploying applications
from the cloud (e.g., Salesforce, Google AppEngine, and Microsoft
Azure). An advantage of this model is the ability to provide all
aspects of software development (design, testing, version control,
maintenance, and hosting) over the Internet [98]. In Software as a
Service (SaaS), users access the applications centrally hosted in the
cloud using a thin client (such as a web browser or a mobile
application) instead of installing software on their own computers
(e.g., Joyent and SalesForce CRM). The benefits of this model of
cloud service include centralized configuration and hosting,
software release updates without requiring reinstallation, and
accelerated feature delivery [31].
Cloud computing represents the convergence of IT efficiency
and business agility [51]. IT efficiency results from the use of
scalable hardware and software resources [71], improvement in
work efficiency and coordination among firms [65], and highly
available services [6]. The business agility of cloud computing is
the ability to deploy computational tools rapidly, reduce upfront
capital expenditures [71,59], and respond more quickly to
changing market needs [6,71]. Cloud computing eliminates
traditional boundaries between businesses. The capacity to
seamlessly deliver IT functions as cloud-based solutions has
proven viable and cost-effective as evidenced by its growing
adoption.
2.2. Adoption models
Two theories are commonly used in innovation diffusion and
adoption studies in organizations. They are the diffusion of
innovation (DOI) theory [91] and the TOE Framework [104]. Other
popular theories such as the technology acceptance model (TAM)
[27,28], the theory of planned behavior (TPB) [2], and the unified
theory of acceptance and use of technology (UTAUT) [108] are not
considered in this research because they pertain to an individual’s
choice.
 T. Oliveira et al. / Information & Management 51 (2014) 497–510
2.2.1. Diffusion of innovation (DOI)
DOI [91] is a prominent adoption model used in Information
Systems (IS) research [3,7,29,48,123,58]. It proposes five attributes
that explain the adoption of innovation in an organization. They
are: (1) relative advantage, the extent to which an innovation is
better than the previous generation; (2) compatibility, the degree
to which an innovation can be assimilated into the existing
business processes, practices, and value systems; (3) complexity,
how difficult it is to use the innovation; (4) observability, the
extent to which the innovation is visible to others; and (5)
trialability, the ease of experimenting with the innovation. DOI is
predominantly based on the characteristics of the technology and
the users’ perceptions of the innovation. An organization is a more
complex entity than an individual. Rogers [91] suggests that
innovation is a communication process using the various channels
within the social system. Three factors influence the adoption of
innovation in organizations. They are individual (leadership
attitude toward change), internal organizational structure (cen-
tralization, complexity, interconnectedness, the number of
employees, and organizational slack), and external characteristics
(system openness) of the organization.
2.2.2. Technology-organization-environment (TOE) framework
Tornatzky and Fleischer [104] proposed the TOE framework to
explain the process of innovation in the context of an enterprise. It
considers three features of an enterprise that influence the
adoption of innovation: the contexts of technology, organization,
and environment. The technology context refers to the internal and
external technology relevant to the organization and the technol-
ogies that are available for possible adoption. The organization
context refers to the descriptive characteristics of the firm (i.e.,
organizational structure, firm size, managerial structure, the
degree of centralization), resources (human and slack resources),
and the process of communication (formal and informal) among
employees. The environment context comprises market elements,
competitors, and the regulatory environment [104,83,85,121].
2.3. Related literature on cloud computing adoption
Many studies have addressed the technical and operational
issues related to cloud computing, including topics such as the
selection of cloud computing services based on costs and risks [72],
audit protocol for secure storage and computation in the cloud
[114,76], analytical models for determining the cost of ownership
of cloud computing [73,110], and issues of security, privacy risks,
and information loss [126,111,32].
Our search of scholarly databases identified only a few
published journal articles that evaluate cloud computing adoption
from an organizational perspective (see Table 1). Low et al. [65]
used the DOI and TOE framework to investigate the adoption of
cloud computing in the Taiwanese high-tech industry. Their
research model was not expansive, as it did not consider key
factors such as cost savings and security concerns that are critical
to the firm’s adoption of cloud computing. Furthermore, they
evaluated the adoption of cloud computing as a dichotomous
dependent variable and not as a continuous process. Lin and Chen
[59] conducted a semi-structured interview among 19 IT profes-
sionals in Taiwan. Their qualitative assessment indicated that IT
companies are reluctant to adopt cloud computing until the
uncertainties associated with cloud computing (e.g., security and
standardization) are reduced and successful business models have
emerged. Trigueros-Preciado et al. [105] used a qualitative and
quantitative analysis methodology to identify the barriers to cloud
adoption. They surveyed 94 SMEs in Spain and concluded that
knowledge about cloud computing was low among the firms, and a
company’s ignorance was the main barrier to cloud computing
499
adoption. Nkhoma and Dang [82] used secondary data from the
survey of a large services company to study the drivers and barriers
to cloud computing adoption. Wu et al. [117] investigated whether
the information processing requirements and capacity affect the
firm’s intention to adopt cloud computing; they used the DOI
theory and information processing view (IPV) to conduct their
study in the supply chain domain. Abdollahzadehgan et al. [1]
proposed using the TOE framework to evaluate the barriers to
cloud computing adoption in SMEs; their study did not include
hypothesis testing or empirical validation. Kshetri [53] used the
institutional theory to investigate the perception and security
issues based on the context provided by formal and informal
institutions; no empirical assessment was provided.
The review of published journal articles indicates that most
studies empirically evaluate the direct effects of innovation or
contextual factors or conduct analysis using qualitative methods or
secondary data on the adoption of cloud computing. No study has
taken a holistic approach to empirically validate the direct and
indirect effects of the innovation characteristics and the underly-
ing technology, organization, and environment contexts. Yang and
Tate [119] voice similar concerns by classifying the published
journal articles on cloud computing into four research themes:
technological, business issues, domains and applications, and
conceptualization. Based on a descriptive literature review of 205
refereed journal articles, their study indicates that research on
cloud computing is skewed mostly toward technological issues.
They highlight the paucity of cumulative research to address the
social, organizational, and environmental perspectives of cloud
computing. In this study we address this crucial research gap by
developing an integrative research model that combines the
theoretical perspectives of the diffusion of innovation and the
technology, organization, and environment contexts. We use the
model to holistically evaluate the determinants of cloud comput-
ing adoption in an organization.
2.4. Combining DOI and TOE
Many researchers have called for approaches that combine
more than one theoretical perspective to understand the IT
adoption of innovative new technologies [85,117,33,67]. To better
understand the organizational decisions related to the adoption of
technological innovation, the context of the study should be
comprehensive and the variables tailored to the specificity of the
innovation [19]. DOI and TOE have been used extensively in IT
adoption studies, and have enjoyed consistent empirical support.
In many ways, the TOE perspectives overlap with the
innovation characteristics identified by Rogers. Therefore, the
value of incorporating the TOE contexts to strengthen the DOI
theory is well-recognized [85,117,19,47]. The technology context
is implicitly the same idea as that of Rogers [91]. DOI’s internal and
external organizational characteristics include the same measures
as TOE’s organization context [47]. There are also important
differences between the two theories. TOE does not specify the role
of individual characteristics (e.g., top management support). Here,
the DOI theory suggests the inclusion of top management support
in the organization context. Similarly, DOI does not consider the
impact of the environmental context. Because of DOI’s short-
comings, the TOE framework helps to provide a more comprehen-
sive perspective for understanding IT adoption by including the
technology, organization, and environment contexts [123]. The
theories thus meaningfully complement each other [85].
To identify the constructs of the integrative research model, we
used the DOI theory and the TOE framework as the basis to conduct
an elaborate search of scholarly databases, including EBSCOHost’s
Academic Search Complete and Business Source Complete, all
databases within Proquest (e.g., ABI/INFORM Complete), databases
500 T. Oliveira et al. / Information & Management 51 (2014) 497–510

Table 2
Model constructs from DOI theory and/or TOE framework in peer reviewed journals.

Model/theory Technology/ Source Constructs

dependent variable
Rel. Compatibility Complexity Tech. Firm Cost Top Security Comp. Reg.
advantage readiness size savings mgmt. concerns pressure support
support

TOE Adoption of open systems [19] X

DOI and TOE Internet (adoption and [3] X X X
and others utilization of the internet)
DOI and TOE Benchmarking adoption [7] X X X
TOE and DOI Green IT adoption [13] X X
and others
DOI and TOE Collaborative commerce [23] X X X X X
adoption
DOI RFID adoption [107] X X X
DOI Internet-based purchasing [52] X X
application assimilation
TOE E-commerce adoption [39] X X X X X X
TOE Internet/E-business adoption [48] X X X X X X
TOE Electronic data interchange [55] X X X X
(EDI) adoption
TOE Knowledge management and [89] X X X X X X
enterprise systems adoption
TOE RFID adoption [102] X X X X X X
TOE E-business adoption [61] X X
TOE and others E-business adoption [83] X X X
TOE E-business use [121] X X X X
DOI and TOE E-business use [123] X X X X X X X X
TOE E-business initiation, [124] X X X
adoption, routinization
TOE Intention to adoption [82] X X X X
cloud computing
DOI and TOE Cloud computing adoption [65] X X X X X X X
TOE Cloud computing adoption [1] X X X X X X X
DOI and others Cloud computing adoption [117] X X
DOI Cloud computing adoption [59] X X X

Note: Diffusion of innovation (DOI); technology-organization-environment (TOE).

within PsycNet, and Google Scholar. We then grouped the well-
cited studies to determine the most representative factors
evaluated in the published literature on adoption studies. Finally,
we examined each construct to determine its applicability to cloud
computing adoption. Table 2 summarizes the factors identified by
this systematic approach and the dependent variable they
measure.
Among the five attributes of DOI, three innovation character-
istics are applicable to cloud-computing adoption: relative
advantage, complexity, and compatibility. Trialability and observ-
ability are not widely used in IT innovation studies [23]. Thus,
following the general guidance of IS research, we disregard those
two attributes because they are not relevant to cloud-computing
technology. Rogers [91] states that ‘‘the nature of the innovation
determines the type of relative advantage that is important to the
adopter’’ and that the relative advantage of the innovation can be
‘‘expressed as economic profitability, as conveying social prestige,
or in other ways.’’ [91] In the context of our study, we posit that
cloud computing may lead to the economic advantage of cost
savings [65,49]. Similarly, security concerns may diminish the
relative advantage of cloud computing. We therefore include two
additional variables, namely, cost savings and security concerns as
antecedents to the relative advantage of cloud computing. They
determine whether cloud computing will be relatively advanta-
geous if it provides cost savings and less advantageous if there are
security concerns.
From the TOE framework, the technology context determines
whether the technological readiness of the firm will constrain or
facilitate the adoption of cloud computing. Factors specific to the
organization context are top management support and firm size.
The extent to which the environmental context may influence the
firm’s decision to adopt cloud computing are identified by two
variables, competitive pressure and regulatory support.
3. Research model and hypotheses
The integrative research model is shown in Fig. 1. By combining
the innovation characteristics of cloud computing with the
technology, organization, and environment contexts of the TOE
framework, we address the call by scholars for a more holistic
model to understand the diffusion of IT innovation [85,117,33,68].
3.1. Hypotheses of innovation characteristics
A security breach is an incident in which a company or a
government agency loses information, personal records, or other
sensitive data [11]. Cloud computing is the convergence of storage
and computing in a shared multi-user environment, which
heightens security concerns [95,96] because it leaves companies
unaware and uncertain of potential security risks [8]. In addition,
identity management still remains a challenge in the cloud
environment. The lack of mature security protocols and identity
management standards implies that organizations will be reluc-
tant to adopt a cloud solution. Moving to the cloud adds new layers
of complexity for securing data and thus influences a firm’s
decision to adopt the innovation. Hence,
H1a. Security and privacy concerns will negatively influence the
relative advantage of cloud computing.
 T. Oliveira et al. / Information & Management 51 (2014) 497–510
Fig. 1. The research model.
Cloud computing creates an opportunity for innovation, lowers IT
expenditures, and reduces the total cost of computing [17]. Clout
computing enables innovation by allowing companies to focus on
the core business rather than be stifled by changes in technology. By
adopting cloud computing, a firm can reduce the time devoted to
system maintenance and routine upgrades. Cloud computing also
reduces infrastructure costs, decreases energy consumption, and
lowers maintenance expenditures [71]. Vendor specialization
enables cloud service providers to offer IT functions at lower costs
and pass the cost savings from economies of scale to the end user [8].
As an enabler of the swift adoption of changing technologies, cloud
computing offers cost-effective ways to transform businesses by
reinventing how goods and services are sold and consumed. Hence,
H1b. Cost savings will positively influence the relative advantage
of cloud computing.
Relative advantage is the ‘‘degree to which an innovation is
perceived as being better than the idea it supersedes’’ [91].
Innovations that have a clear, unambiguous advantage in creating
strategic effectiveness (e.g., increasing sales) and operational
effectiveness (e.g., reducing operational costs) have a greater
impetus for adoption [43]. If the benefits of the technology (in this
case, cloud computing) exceed existing practices and processes
[49], the merits will positively influence its adoption. Therefore,
H1. Relative advantage will positively influence cloud-computing
adoption.
Complexity is the ‘‘degree to which an innovation is perceived to
be relatively difficult to understand and use’’ [91]. The easier it is to
integrate the technology into business operations, the greater the
chance of its adoption. The cloud environment offers the ability to
pool resources instantaneously to match the workload. However,
adopting a cloud-based solution can be challenging to companies that
lack technological expertise and IT specialists. For example, the
integration of existing applications to a specialized cloud infrastruc-
ture (e.g., Oracle’s Elastic Cloud or HP’s Cloud System) may require a
level of expertise that is not readily available within the firm.
Challenges also arise in the use of cloud-based solutions when well-
defined boundaries to secure the business processes and data privacy
in a shared, multi-tenant environment are not fully refined [26]. Thus,
H2. Complexity will negatively influence cloud-computing adoption.
501
Rogers [91] defines compatibility as ‘‘the degree to which the
innovation fits with the potential adopter’s existing values,
previous practices, and current needs.’’ Compatibility is an
important determinant of innovation adoption [7,29,63,69,97].
For example, if the purpose of adopting cloud computing is to take
advantage of the scalability benefits for applications with low
security concerns, then offloading the capability to the cloud
infrastructure makes economic sense. Therefore, business capabil-
ity and compatibility are factors that will determine whether cloud
computing will be adopted by an organization. Thus,
H3. Compatibility will positively influence cloud-computing
adoption.
3.2. Hypotheses of the TOE context
3.2.1. The technology context
The technology context refers to the technological character-
istics available in the organization for the adoption of technology.
It includes both the structural aspects and the specialized human
resources. The structural aspects refer to the platform or the
technological infrastructure (e.g., installed network technologies
and enterprise systems) within the firm that the cloud-computing
services can complement or replace (e.g., implementing a
collaborative document sharing solution using cloud-based
storage). The specialized human resources are the people within
the organization who have the knowledge and skill to implement
the cloud-computing services (e.g., employees with computer
skills, IT specialists) [112]. Together they enhance the technologi-
cal readiness of an organization. Therefore, firms with a higher
degree of technological readiness are better positioned for the
adoption of cloud computing. Hence,
H4. Technological readiness will positively influence cloud-com-
puting adoption.
3.2.2. The organization context
The organization context is defined in terms of the resources
available to support the adoption of an innovation [64]; it refers to
the characteristics of the firm that facilitate or constrain the
adoption and implementation of the innovation. Multiple factors
influence the relationship between organizational structure and
the adoption of innovation, including the level of centralization,
the distribution of power and control, information links, the
502 T. Oliveira et al. / Information & Management 51 (2014) 497–510
availability of slack resources, lateral communication, firm size,
and top management support [65,104,118]. Of these, top
management support and firm size are the most important factors
for assessing the adoption of cloud computing [65].
Top management support plays an important role in cloud-
computing adoption because it guides the allocation of resources,
the integration of services, and the re-engineering of processes
[65]. Top management that recognizes the benefits of cloud
computing will likely allocate the necessary resources for its
adoption and influence the organization’s members to implement
the change. When top management fails to recognize the benefits
of cloud computing to the business, the management will be
opposed to its adoption. Thus,
H5. Top management support will positively influence cloud-
computing adoption.
Firm size is the other organizational factor that can influence
the adoption of cloud computing. Large firms have an advantage
over small ones because they have more resources and can take
greater risks associated with innovation adoption [102,124].
Studies have shown that small firms, although more versatile,
do not readily adopt newer technologies [64]. Thus, firm size is a
determinant in the adoption of cloud computing [65]. Hence,
H6. Firm size will positively influence cloud-computing adoption.
3.2.3. The environment context
The environment context is the setting in which a firm conducts
its business and is influenced by the nature of the industry, the
firm’s competitors, access to resources supplied by others, and
interactions with the government [64]. Of these, the determinants
that have an impact on cloud adoption are the firm’s competition
and the regulatory environment [124].
Competitive pressure has long been recognized in the innova-
tion diffusion literature as an important driver for technology
diffusion. It refers to the pressure felt by the firm from industry
competitors [65,83,122]. Adopting new technology is often a
strategic necessity to compete in the market place. By adopting
cloud computing, firms can benefit from greater operational
efficiency, better market visibility, and more accurate access to
real-time data [75]. Hence,
H7. Competitive pressure will positively influence cloud-comput-
ing adoption.
Regulatory support refers to the support given by a government
authority to encourage the assimilation of IT innovation by firms
[124]. The impact of existing laws and regulations can be critical in
the adoption of new technologies. Government regulations
can encourage or discourage businesses from adopting cloud
Table 3
Sample characteristics (N = 369).
By industry
Manufacturing
Construction 33
Production industry 107
Services sector
Services (hotel, recreation, banking, real estate) 173
Health 16
Commerce 32
Information and communication 8 2.17%
By firm size
Micro 32
Small 100
Medium 170
Large 67
computing. For example, legislators in the United States and the
European Union member states have specific mandates to protect
organizational data. When a government requires businesses to
comply with cloud-specific standards and protocols, firms will be
more willing to adopt cloud computing. Thus,
H8. Regulatory support will positively influence cloud-computing
adoption.
4. Research methodology
4.1. Measurement
To evaluate the theoretical constructs, a survey was conducted
in Portugal covering the manufacturing and service industries. A
questionnaire was developed by an expert panel composed of
experienced researchers in the field of Information Systems. The
questionnaire items were based on published literature (see
Appendix A). To be consistent with the sources, the constructs
(security concerns, cost savings, relative advantage, complexity,
compatibility, technological readiness, top management support,
competitive pressure, and regulatory support) were measured
using a five-point Likert scale on an interval level ranging from
‘‘strongly disagree’’ to ‘‘strongly agree.’’ The number of employees
and the turnover volume (micro, small, medium, and large) are
used as measures of the firm size [123,24,88]. Because the
questionnaire was administered in Portugal, the English version of
the instrument was translated into Portuguese and reviewed by a
group of five established academic IS researchers and two language
experts. To test the instrument, a pilot study was conducted among
30 firms. These firms were not included in the main survey. The
results provided evidence that the scales are reliable, valid, and
have translation equivalence [14].
4.2. Data
An online version of the questionnaire was emailed to qualified
individuals (CIOs, directors, and senior IS managers) at 2000
manufacturing and service companies in Portugal. The company
and contact data were provided by Dun & Bradstreet, one of the
world’s leading sources for commercial information and insight on
businesses. Data were collected using an online questionnaire
administered in two stages from mid-2012 to early 2013. The
study utilized the ‘‘key informants’’ approach for data collection
[8,4] to identify the respondents in the organization who are most
involved in and knowledgeable about cloud computing. To target
respondents who assume the role of key informant, we provided a
clear description of cloud computing and gave examples. To
increase content validity, we indicated that the survey should be
filled out by the individual in the organization who is most familiar
By respondent’s position
CIO, CTO, VP of IS or E-Business 8 2.17%
8.94% IS Manager, Director, Planner 108 29.27%
29.00% Other managers in IS Department 32 8.67%
CEO, President, Director 81 21.95%
46.88% Business Operations Manager, COO 30 8.13%
4.34% Administration/Finance Manager, CFO 44 11.92%
8.67% Others (Marketing VP, Other Managers) 66 17.89%
8.67%
27.10%
46.07%
18.16%
 T. Oliveira et al. / Information & Management 51 (2014) 497–510 503

Table 4 Table 5
Mean and standard deviation of full and subsamples. Reliability indicators for full sample and sub-samples.

Constructs Full sample Manufactur- Service Constructs Full sample Sub-sample Sub-sam-
(n = 369) ing (n = 140) (n = 229) manufactur- ple ser-
ing vices
Mean SD Mean SD Mean SD
AVE CR AVE CR AVE CR
Security concerns 3.76 1.11 3.65 1.17 3.83 1.06
Cost savings 3.14 0.79 2.93 0.82 3.27 0.75 Security concerns 0.90 0.96 0.93 0.98 0.87 0.95
Relative Advantage 3.33 0.87 3.13 0.85 3.44 0.86 Cost savings 0.71 0.88 0.74 0.90 0.68 0.87
Complexity 2.26 0.80 2.41 0.83 2.17 0.77 Relative advantage 0.77 0.94 0.79 0.95 0.75 0.94
Compatibility 2.90 0.80 2.77 0.80 2.98 0.80 Complexity 0.72 0.91 0.75 0.92 0.68 0.89
Technology readiness 4.27 1.19 3.88 1.24 4.54 1.10 Compatibility 0.67 0.91 0.70 0.92 0.66 0.90
Top management support 2.89 0.96 2.80 0.95 2.94 0.97 Technology readiness 0.59 0.81 0.63 0.84 0.53 0.77
Firm size 2.54 0.86 2.55 0.77 2.54 0.91 Top management support 0.74 0.89 0.72 0.88 0.75 0.90
Competitive pressure 2.30 0.86 2.22 0.78 2.36 0.90 Firm size 0.80 0.89 0.82 0.90 0.79 0.88
Regulatory support 2.58 0.85 2.55 0.86 2.60 0.85 Competitive pressure 0.72 0.88 0.68 0.87 0.73 0.89
Cloud computing adoption 2.40 1.61 2.14 1.49 2.56 1.66 Regulatory support 0.88 0.93 0.91 0.95 0.85 0.92
Cloud computing adoption 0.92 0.96 0.89 0.94 0.93 0.96

Note: Average variance extracted (AVE) and composite reliability (CR).

with the organization’s direction with cloud computing. To

encourage participation and reduce self-reporting bias, we gave
all participants the opportunity to receive the findings of the study
and a report on how their firms compare to other firms of similar
profile. In the first stage, 249 valid responses were received. A
follow-up email was sent in the second stage to those who did not
respond in the first stage. In this second stage, 120 valid responses
were obtained, for a combined total of 369 usable responses. The
overall response rate was 18.5%, which is comparable to other
studies of similar scale [121,8]. Of the valid responses, 62% (229
firms) were received from the services sector, and 38% (140 firms)
were received from the manufacturing sector. The profile of the
sample is shown in Table 3.
To test for nonresponse bias, the sample distribution of the
early and late respondent groups was compared using the
Kolmogorov–Smirnov (K–S) test [93]. The sample distributions
of the two groups did not differ statistically, indicating an absence
of nonresponse bias [93]. The respondents were qualified
individuals (see Table 3), indicating a good quality of data. The
common method bias was examined using Harman’s one-factor
test [87]. No significant common method bias was found in the
data set. The mean and standard deviation of all the constructs
from the full and sub-samples (service and manufacturing) are
shown in Table 4.
5. Results
Structural equation modeling (SEM) was used to empirically
assess the research model. The Kolmogorov–Smirnov test con-
firmed that none of the measurement items was distributed
normally (p < 0.001). This allows for the safe use of partial least
squares (PLS) for the analysis, as it does not require a normal
distribution [21]. For PLS estimation, the minimum sample size
should satisfy one of the two following conditions: (1) ten times
the largest number of formative indicators used to measure one
construct; or (2) ten times the largest number of structural paths
directed at a particular latent construct in the structural model
[116,90]. Our sample consists of 369 firms, thus meeting the
necessary conditions for using PLS. Smart-PLS software [90] was
used to assess the reliability and validity of the measurement
model before testing the various structural models. A two-fold
analysis approach was taken to evaluate the research model. To
understand the key determinants of cloud adoption, we conducted
a quantitative assessment of the full sample. To investigate how
the determinants vary across different industries, we analyzed the
sub-samples of the data for the manufacturing and services
sectors.
5.1. Measurement model
The measurement model results (reliability, validity, correla-
tions, and factor loading) are shown in Tables 5 and 6 and
Appendix B. The reliability of the scales was tested using composite
reliability (CR) (Table 5). For the full sample and the industry-
specific samples, the results are higher than 0.7, suggesting that
scales are reliable [45]. To ensure a sufficient degree of convergent
validity, it is desired that the average variance extracted (AVE) value
be greater than 0.50 [34]. Measurement models for both industries
demonstrate convergent validity (Table 5). All items for both the full
sample and the industry-specific sub-samples have loadings greater
than 0.7 and are statistically significant at the 0.01 level (see
Appendix B). Therefore, all items are retained. Finally, the
discriminant validity of the constructs was assessed using two
measures, Fornell–Larcker criteria and cross-loadings. The first

Table 6
Correlations and AVEs.

Constructs 1 2 3 4 5 6 7 8 9 10 11

1. Security concerns 0.95

2. Cost savings 0.33 0.85
3. Relative advantage 0.28 0.67 0.88
4. Complexity 0.02 0.20 0.17 0.85
5. Compatibility 0.17 0.64 0.67 0.24 0.82
6. Technology readiness 0.36 0.38 0.35 0.19 0.35 0.77
7. Top management support 0.22 0.46 0.44 0.17 0.48 0.46 0.86
8. Firm size 0.24 0.14 0.15 0.15 0.04 0.31 0.18 0.89
9. Competitive pressure 0.07 0.37 0.45 0.01 0.51 0.28 0.43 0.12 0.85
10. Regulatory support 0.01 0.35 0.41 0.01 0.44 0.15 0.25 0.03 0.34 0.94
11. Cloud computing adoption 0.26 0.40 0.42 0.23 0.40 0.44 0.50 0.29 0.34 0.13 0.96

Note: The diagonal in bold is the square root of the average variance extracted (AVE). These results are for the full sample only. The results for sub-samples are identical and
available from the author on request.
504 T. Oliveira et al. / Information & Management 51 (2014) 497–510

Table 7
Relevant constructs for the structure model.

Constructs Full sample (n = 369) Manufacturing sub-sample Services sub-sample (n = 229)

(n = 140)

Path coeff. T-Value Path coeff. T-Value Path coeff. T-Value

Factors of relative advantage of cloud computing (direct effects)

Security concerns 0.069 1.540 0.059 0.770 0.079 1.480
Cost savings 0.644 15.773*** 0.645 10.739*** 0.627 11.097***
R2 = 0.449 R2 = 0.446 R2 = 0.429

Cloud computing adoption factors (direct effects)

Relative advantage 0.154 2.358** 0.351 3.060*** 0.085 1.087
Complexity 0.085 1.970* 0.031 0.420 0.114 2.004**
Compatibility 0.076 1.173 0.071 0.509 0.123 1.655*
Technology readiness 0.169 3.569*** 0.197 2.178** 0.157 2.795***
Top management support 0.265 4.918*** 0.157 1.587 0.325 5.121***
Firm size 0.135 3.071*** 0.152 1.694* 0.119 2.394**
Competitive pressure 0.084 1.606 0.098 1.021 0.081 1.193
Regulatory support 0.078 1.618 0.084 0.884 0.075 1.216

Cloud computing adoption factors (indirect effects)

Security concerns 0.011 1.232 0.021 0.712 0.007 0.678
Cost savings 0.099 2.420** 0.227 3.012*** 0.053 1.056
2 2 2
R = 0.381 R = 0.361 R = 0.408
*
Significance at p < 0.10.
**
Significance at p < 0.05.
***
Significance at p < 0.01.

criterion postulates that the square root of AVE should be greater
than the correlations between the construct [34]. Because the square
root of AVE is greater than the correlation between each of the pair
factors (Table 6), the first criterion is satisfied. The second criterion
requires that the loading of each indicator should be greater than all
cross-loadings [20]. The loading and cross-loading tables (available
from the authors on request) show that the patterns of loadings are
greater than cross-loadings. Thus, both measures are satisfied for the
full sample and the industry-specific samples.
5.2. Structural model
Examining the correlation table for evidence of multicollinear-
ity among exogenous constructs (Table 6) shows that the highest
correlation between exogenous constructs is 0.67. Variance
inflation factors (VIF) are lower than 3, which is less than the
conservative threshold of 5. This suggests that there are no
concerns of multicollinearity.
The analysis of hypotheses was based on the examination of the
standardized paths. The path significance levels were estimated
using the bootstrapping method (500 re-samples). The results of
the analysis are summarized in Table 7. For the full sample, an
examination of R2 as a descriptive measure shows that security
concerns and cost savings explain 44.9% of the relative advantage
of cloud computing. For the full sample, the hypothesis of cost
savings as a predictor of the relative advantage of cloud computing
(H1a) is confirmed (p < 0.01), and the hypothesis of security
concerns (H1b) (p > 0.10) is not confirmed. The hypotheses for
relative advantage (H1) (p < 0.05), complexity (H2) (p < 0.10),
technology readiness (H4) (p < 0.01), top management support
(H5) (p < 0.01), and firm size (H6) (p < 0.01) are also confirmed for
the full sample. Compatibility (H3), competitive pressure (H7), and
regulatory support (H8) are not statistically significant for the full
sample. In our model, the indirect effect of cost savings in cloud-
computing adoption is the path coefficient of cost savings to
explain relative advantage multiplied by the path coefficient of
relative advantage to explain cloud-computing adoption. For the
full sample, this equates to 0.099 (0.644*0.154), and the results of
our analysis indicate that the indirect effect of cost savings is
statistically significant (p < 0.05). Based on a similar analysis, our
findings indicate that the indirect effect of security concerns is not
statistically significant (p > 0.10) for the full sample. The research
model explains 38.1% of cloud-computing adoption. The findings
indicate that the research model is significant in explaining the
adoption of cloud computing by firms.
The examination of R2 as a descriptive measure for the industry-
specific sub-samples shows that security concerns and cost savings
explain 44.6% and 42.9% of the relative advantage of cloud
computing for the manufacturing and services sectors, respective-
ly. For both the sub-samples, the hypothesis of cost savings as a
predictor of the relative advantage of cloud computing (H1a) is
confirmed (p < 0.01). The hypothesis of security concerns (H1b)
(p > 0.10) is not confirmed for either of the sub-samples.
For the manufacturing sector sub-sample, the following findings
are noteworthy. Hypotheses for relative advantage (H1) (p < 0.01),
technology readiness (H4) (p < 0.05), and firm size (H6) (p < 0.01)
are confirmed. Complexity (H2), compatibility (H3), top manage-
ment support (H5), competitive pressure (H7), and regulatory
support (H8) are not statistically significant. The indirect effect of
cost savings for the manufacturing sub-sample is 0.227
(0.645*0.351), and is statistically significant (p < 0.01), whereas
the indirect effect of security concerns is found to be not statistically
significant. This indicates that cost savings not only explains relative
advantage but also that it indirectly influences cloud-computing
adoption. The research model explains 36.1% of cloud-computing
adoption among firms in the manufacturing sector.
For the services sector sub-sample, complexity (H2) (p < 0.05),
compatibility (H3) (p < 0.10), technology readiness (H4)
(p < 0.01), top management support (H5) (p < 0.01), and firm size
(H6) (p < 0.05) are confirmed. The relative advantage (H6),
competitive pressure (H7) and regulatory support are not
statistically significant. For the services sector, the indirect effect
of cost savings is 0.053 (0.627*0.085) and 0.007 (0.079*0.085) for
security concerns. The results indicate that cost savings and
security concerns are not statistically significant (p > 0.10) for the
services sector. The research model explains 40.8% of cloud-
computing adoption among firms in the services sector.
6. Discussion
Understanding the determinants of cloud computing is para-
mount as organizations consider the adoption of cloud computing
 T. Oliveira et al. / Information & Management 51 (2014) 497–510
for collaboration, content management, mobility, business process
transformation, and rapid application development. The goal of
this study is to assess the determinants of cloud-computing
adoption by using an integrative lens that combines the innovation
characteristics of cloud computing and the technology, organiza-
tion, and environment perspectives of the organization. The results
show that five factors influence the adoption of cloud computing:
relative advantage, complexity, technological readiness, top
management support, and firm size (see Table 7). The results also
indicate that the facilitators and inhibitors of cloud-computing
adoption are different in the manufacturing and services sectors
(see Table 7).
Innovation characteristics: Of the three innovation character-
istics, relative advantage (H1) is found to have a positive influence
on cloud-computing adoption. This finding is consistent with
similar studies reported in the literature [49,101,113]. The study
confirms that organizations recognize the relative advantage of
cloud computing. Advantages identified by the study include
improving the quality of business operations, performing tasks
more quickly, increasing productivity, and providing new business
opportunities. In investigating the role of the innovation char-
acteristics of cloud computing across the manufacturing and
services sectors, it is found that relative advantage is more
important for firms in manufacturing than for firms in the service
industry. On a comparative note, Borgman et al. [12] found relative
advantage to be significant among global enterprises, whereas Low
et al. [65] and Lin and Chen [59] found it to be an inhibitor of cloud-
computing adoption by firms in the high-tech industry.
To determine whether cloud computing will be relatively
advantageous if it provides cost savings and less advantageous if
there are security concerns, we estimated the full and the
manufacturing and services sub-samples with both constructs
as predictors of relative advantage. Of the two variables, cost
savings (H1b) is confirmed as the important driver to explain the
relative advantage of cloud computing. This result is consistent
with studies that have found cost savings to be a strong driver of
the adoption of cloud-based solutions in industries such as
technology, manufacturing, finance, logistics, services, and educa-
tion [37,8,62].
In contrast, security concerns (H1a) are not found to inhibit the
adoption of cloud computing in either the full sample or the industry-
specific sub-samples. A possible explanation is the recent advances in
privacy-enhancing techniques, monitoring mechanisms, and encryp-
tion schemes to ensure confidentiality, integrity, and the security of
data in the cloud environment [111,80,99]. In addition, newly
established standards and federal regulations such as the FedRamp
[78], and the Federal Information Security Management Act help
establish organizational trust and control over data when adopting
cloud-based solutions. This may explain the lack of concern regarding
security and privacy when considering a cloud strategy.
Complexity (H2) is an inhibitor to the adoption of cloud-
computing in the services sector. The notion of complexity
associated with cloud computing is no different than other
disruptive technologies and appears to be a significant determi-
nant for cloud adoption. It may be that complexity is associated
with the perception of change, which is known to cause discomfort
and frustration [50]. Our findings indicate that complexity is not an
inhibitor among firms in the manufacturing sector. Complexity
was found to be insignificant by Low et al. [65] and determined to
be inconclusive by Borgman et al. [12]. Thus, in relation to earlier
studies, the results for complexity are mixed, and additional
research is needed before reaching more definite conclusions.
Similarly, compatibility (H3) is found to be a facilitator for
cloud-computing adoption in the services sector but not significant
in the manufacturing sector. Its importance in the service industry
may be explained by the work style preferences and internet based
505
business operations that prevail among firms in this sector [56].
For manufacturing, the non-significance of compatibility may be
attributable to the nature of applications (e.g., the prominence of
internal software solutions such as resource planning software and
computer-controlled machining), and limited requirements for
Internet-based solutions in the line of business [42,89]. Compati-
bility is a facilitator of innovation in some studies [113,15,39] but
was found to be non-significant in other studies [65,12]. Thus,
compared to earlier research, the results for compatibility are also
mixed, and more investigation is needed to reach a definitive
conclusion.
Technology context: Technological readiness (H4) is a facilitator
of cloud-computing adoption. The study finds that firms with an
established technology infrastructure and workforce with the
necessary skills and technical competence are better suited for
cloud integration. However, earlier studies have suggested that
technology readiness may not necessarily influence cloud-com-
puting adoption. For example, Low et al. [65] found technological
readiness to be irrelevant for companies in the technology sector.
Wu et al. [117] found that firms with greater information-
processing capacity are less likely to adopt cloud computing. The
results of our study indicate otherwise. The implementation of
cloud computing can possibly disrupt services and create
management challenges in IT- and non-IT-centric businesses.
The finding indicates that organizations must ensure that the
technology infrastructure and the availability of IT specialists are
adequate for the integration of cloud-based solutions in the
business operations with minimal interruption.
Organization context: Our study provides empirical evidence
that top management support (H5) is significant in explaining the
adoption of cloud computing. Evidence from the study indicates
that top management can influence cloud-computing adoption by
demonstrating support in the form of committing financial and
organizational resources and engaging in the process. This finding
is consistent with results from earlier studies on the adoption and
use of innovative technologies [49,89,66]. However, our findings
also indicate that top management support is not significant to
firms in the manufacturing sector. Plausible explanations include
the unrecognized value of cloud computing in the manufacturing
industry, a lack of industry-specific standards for cloud computing,
and the manufacturing sector viewing cloud services as incurring
high costs and risks [113,66].
Firm size (H6) is a predictor of cloud-computing adoption. This
finding is consistent with literature suggesting that larger
companies have resources to cover the cost and investment risk
of an emerging technology [113,22,25]. Conversely, smaller firms
generally lack the resources needed for the construction of
knowledge, and the implementation and testing of cloud
computing [102]. In related studies, Low et al. [65] found firm
size to be a facilitator of cloud computing, whereas Borgman et al.
[12] determined it to be inconclusive.
Environment context: Cloud computing is a relatively recent area
of research in the IS discipline, and only a few empirical studies
have addressed the importance of the environment context. Low
et al. [65] found that competitive pressure pushed firms in the
high-tech industry to adopt cloud computing more quickly [65].
Borgman et al. [12], in a study of 24 global enterprises, found
contradictory results, suggesting that the legislative environment
is not statistically significant in explaining cloud-computing
adoption. Based on a survey of 214 SMEs, Ifinedo [48] determined
that competitive pressure positively impacts the adoption of
technologies that support online commerce. He also determined
that pressure from customers, business partners, and government
support did not play significant roles.
The results of our study indicate that both variables in the
environment context (i.e., competitive pressure and regulatory
506 T. Oliveira et al. / Information & Management 51 (2014) 497–510
support) are not determinants of cloud-computing adoption. It is
likely that firms are aware of the benefits of cloud computing, but
specific factors of the technology and organization contexts
prevent the benefits of cloud computing from translating into a
competitive advantage. Regulatory support was also found not to
be significant to the adoption of cloud computing. This does not
necessarily mean that firms disregard prevailing standards and
regulations, but rather that existing legislation protecting the use
of cloud computing has not been earnestly embraced by the
organizational decision makers. Regulatory processes are essential
to instill the sense of trust necessary for firms to convert
innovation into business opportunities. Without economic incen-
tives that make good business sense, advances in technology,
evolving cloud-computing standards, and federal regulations may
not be sufficient to overcome the barriers to the adoption of cloud
computing. The implications of the study to practice and theory are
summarized below.
6.1. Managerial and practical implications
Our study results suggest that relative advantage, complexity,
technological readiness, top management support, and firm size
influence a firm’s adoption of cloud computing. For decision
makers in the organization considering cloud-based initiatives, the
findings provide a sound basis for gauging the direct and indirect
effects of the innovation characteristics of cloud computing as well
as the literature related to its adoption in varying industries.
We hypothesized that cloud computing offers a relative
advantage when there is compatibility with current business
operations and that complexity is an inhibitor to its adoption.
However, it appears that the relative advantage of cloud
computing is not conclusive across industries. Other studies have
identified concerns of hidden costs, human resource requirements
for upgrades and maintenance, the potential for the loss of overall
control of resources, and the poor quality of operation as factors
that impact the relative advantage of cloud computing [65,59,57].
Our findings indicate that cloud computing offers the relative
advantages of achieving economic benefits as well as environ-
mental responsibility benefits. Economic benefits include cost
savings from decreased capital expenditures on IT, lower negotia-
tion costs, and reduced maintenance and energy costs [37,72]. The
benefits of environmental responsibility include reducing envi-
ronmental impacts and generating brand recognition from the
adoption of cloud computing, a type of Green IT solution [81,86].
With regard to security, privacy and user behavior in a cloud
environment, recent technological advances in the cloud-comput-
ing domain [92,77] are promising developments that address these
organizational concerns and help move a firm’s computing
infrastructure to the cloud.
The concerns about complexity are attributable to a lack of
knowledge about the new technology and resistance to changes in
established business processes [46]. However, cloud computing
has the potential to reduce the complexity of IT services by
introducing commonality across business functions and automa-
tion in the management process [9]. As cloud computing matures,
the compatibility of cloud computing with other IT solutions will
be no more difficult than the routine IT management challenges
[12]. To summarize, the innovation characteristics of cloud
computing that influence its adoption are the relative advantage
from cost savings and concerns of complexity. For the manufactur-
ing sector, complexity is not as much of a concern as it is for the
services sector. Compatibility is a greater consideration in the
adoption of cloud computing for firms in the services sector.
With regard to the technology context, the study finds the
technological readiness of the firm to be crucial to cloud-
computing adoption. For the successful adoption of cloud
solutions, managers need to factor in realistic expectations of
the integration challenges and convene a team of experts whose
skill sets cross the conventional IT environment and the cloud
platform. With regard to the organization context, top manage-
ment support and firm size are found to be facilitators of cloud-
computing adoption. The adoption of cloud computing is not
limited to large organizations. However, the results of our study
are similar to earlier studies [65,44] that suggest that larger firms
tend to invest more readily in cloud-based solutions. With regard
to the environmental context, the results suggest that competitive
pressure and regulatory support are not significant drivers of
cloud-computing adoption. Thus, compared with high-tech
industries [65], gauging the competitor’s cloud strategy and
changes in government regulations are not as significant to the
adoption of cloud computing in the manufacturing and services
sectors.
The findings of this study provide valuable insights for managers
to make informed cloud-adoption decisions. In evaluating this
relatively recent technology, our study highlights the importance of
assessing the innovation characteristics against the technology,
organization, and environment context of the organization before
adopting cloud-computing solutions. Even in the presence of
competitive pressure and supportive regulation, without weighing
the technological readiness and top management support within the
firm, the relative advantage of cloud computing may fail to translate
into economic value for the organization.
6.2. Implications for theory
The study makes important contributions to the body of
research on the adoption of new technologies and cloud
computing. In recent years, researchers have called for more
holistic approaches that combine more than one theoretical
perspective to understand the IT adoption phenomenon involving
innovative new technologies [85,117,33,67]. In this research, we
integrate two theoretical perspectives (the DOI theory and the TOE
framework) to develop the research model. The model combines
the innovation characteristics of cloud computing and the
technology, organization, and environment contexts of the
organization that underlie the adoption of cloud computing. It is
different from most other studies on cloud computing that fall
short of holistically evaluating the combined effects of the
innovation characteristics and the contextual factors (see
Table 1). No study has empirically validated the indirect effects
of the antecedents on the determinants of cloud-computing
adoption. The instrument used in this study has been verified
for reliability, validity, and discriminant tests. It is therefore fair to
conclude that the research model and the instrument provide a
sound basis for understanding the determinants of cloud-
computing adoption. The model and the instrument can thus be
adopted for use in other innovation studies.
Based on a large sample (n = 369), we evaluate the adoption of
cloud computing as a continuous process, unlike Low et al. [65]
who use a dichotomous dependent variable. In addition, we use
SEM, which is a statistically powerful technique that requires a
sample of considerable size to attain good rates of adhesion. Our
study thus addresses the research gap between the advancements
in cloud computing and its adoption by organizations that have
been identified by other researchers as requiring further investi-
gation [100,119,106,10]. Our study also found that the
manufacturing and services sectors have different drivers of
cloud-computing adoption. This demonstrates that industry
variance cannot be modeled as control variable in cloud-
computing adoption. Our study thus highlights the need for a
systematic evaluation of the determinants of cloud computing at
the industry level in future research.
 T. Oliveira et al. / Information & Management 51 (2014) 497–510 507

Developing an integrative research model and evaluating it
using a large data set represents an important step toward
addressing the paucity of research in the comprehensive assess-
ment of the social, organizational, and environmental perspectives
of cloud adoption [119]. Our study not only fills this important
research gap but also serves to improve the awareness of firms to
the direct and indirect effects of the constructs that influence the
adoption of cloud computing in the manufacturing and service
industries.
6.3. Limitations and future directions
The study is not without limitations. One limitation is that the
sample is limited to the country of Portugal, which implies that the
study reflects only the situation in that nation. Another limitation
is the possibility of including variables that are not considered in
our research model. For example, our analysis revealed different
determinants of cloud-computing adoption in the two distinct
industries that we studied. Thus, our study suggests the need to
formulate a model for each industry rather than a comprehensive
model that combines the characteristics of innovation as a single
control. Strictly speaking, this will involve additional research to
develop model estimates similar to those developed for the
manufacturing and services sectors. Only then can a fair judgment
regarding the determinants of cloud-computing adoption be made.
Nonetheless, the model proposed in this research should provide a
sound basis for future endeavors in this direction. Another
limitation is that our definition of the adoption of cloud computing
may be too narrow. We therefore suggest extending the research
model to include additional variables to account for factors such as
an organization’s information processing requirements and
information processing capacity. Information processing view
(IPV) is a good candidate [74] to further enrich the model. The
study thus opens possibilities for additional research and a
refinement of the constructs to further elucidate organizational
cloud-computing adoption. Finally, an interesting direction would
be to apply the proposed model to other countries and industries.
7. Conclusion
Cloud computing is an important evolution of IS technology. It
boasts attractive properties such as agility, scalability, pay-per-use,
and cost efficiency. This study sought to identify the determinants
of cloud-computing adoption based on innovation characteristics
and the technology, organization, and environment contexts of
organizations. A research model was developed that integrates the
DOI theory and the TOE framework. The model was empirically
evaluated based on a sample of 369 firms from Portugal. It was
used to compare the adoption of cloud computing in two distinct
sectors, namely manufacturing and services. The results indicated

Table 8
Measurement items.

Constructs Items Adapted source

Security concerns SC1 – Degree of company’s concern with data security on the cloud computing [123,66,115]
SC2 – Degree of concern for customers with data security in cloud computing
SC3 – Degree of concern about privacy in cloud computing
Cost savings CS1 – The benefits of cloud computing are greater than the costs of this adoption [102,94]
CS2 – With cloud computing there is a reduction of energy costs and environmental costs
CS3 – Maintenance costs of cloud computing are very low
Relative advantage RA1 – Cloud computing allows you to manage business operations in an efficient way. [48,39,79]
RA2 – The use of cloud computing services improves the quality of operations.
RA3 – Using cloud computing allows you to perform specific tasks more quickly.
RA4 – The use of cloud computing offers new opportunities.
RA5 – Using cloud computing allows you to increase business productivity.
Complexity CX1 – The use of cloud computing requires a lot of mental effort. [49,102,79]
CX2 – The use of cloud computing is frustrating.
CX3 – The use of cloud computing is too complex for business operations.
CX4 – The skills needed to adopt cloud computing are too complex for employees of the firm.
Compatibility C1 – The use of cloud computing fits the work style of the company. [123,49,102]
C2 – The use of cloud computing is fully compatible with current business operations
C3 – Using cloud computing is compatible with your company’s corporate culture and value system.
C4 – The use of cloud computing will be compatible with existing hardware and software in the company.
Technology readiness TR1 – The percentage of employees who have Internet access. [48,83]
TR2 – The company knows how IT can be used to support operations.
TR3 – Within the company there are the necessary skills to implement cloud computing.
Top management TMS1 – The company’s management supports the implementation of cloud computing. [24,4,125]
support TMS2 – The company’s top management provides strong leadership and engages in the process when it
comes to information systems.
TMS3 – The company’s management is willing to take risks (financial and organizational) involved in the
adoption of cloud computing.
Firm size FS1 – The number of company employees. [123,24,88]
FS2 – Annual business volume.
Competitive pressure CP1 – Firm thinks that cloud computing has an influence on competition in their industry. [48,83,84]
CP2 – Our firm is under pressure from competitors to adopt cloud computing.
CP3 – Some of our competitors have already started using cloud computing.
Regulatory support RS1 – There is legal protection in the use of cloud computing [121,4]
RS2 – The laws and regulations that exist nowadays are sufficient to protect the use of cloud computing.
Cloud computing CCA1 – At what stage of cloud computing adoption is your organization currently engaged? Not [102]
adoption considering; Currently evaluating (e.g., in a pilot study); Have evaluated, but do not plan to adopt this
technology; Have evaluated and plan to adopt this technology; Have already adopted services,
infrastructure or platforms of cloud computing.
CCA2 – If you’re anticipating that your company will adopt cloud computing in the future. How do you
think it will happen? Not considering; More than 5 years; Between 2 and 5 years; Between 1 and 2 years;
Less that 1year; Have already adopted services, infrastructure or platforms of Cloud Computing.

Note: All items are based on 5-point scale except those noted otherwise.
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[122] K. Zhu, K. Kraemer, S. Xu, Electronic business adoption by European firms: a and Haiti. His research has been published and presented
cross-country assessment of the facilitators and inhibitors, Eur. J. Inf. Syst. 12, internationally. He rides and works on motorcycles when
2003, pp. 251–268. he wants to get away from the digital realm.
[123] K. Zhu, S. Dong, S.X. Xu, K.L. Kraemer, Innovation diffusion in global contexts:
determinants of post-adoption digital transformation of European companies,
Mariana Espadanal has a master’s degree in ‘Informa-
Eur. J. Inf. Syst. 15, 2006, pp. 601–616.
tion Management’, with specialization in ‘Business
[124] K. Zhu, K.L. Kraemer, S. Xu, The process of innovation assimilation by firms in
Intelligence and Knowledge Management’ from the
different countries: a technology diffusion perspective on e-business, Manage.
NOVA School of Statistics and Information Manage-
Sci. 52, 2006, pp. 1557–1576.
ment, Universidade Nova de Lisboa. Her current
[125] Y. Zhu, Y. Li, W.Q. Wang, J. Chen, What leads to post-implementation success of
research interests are in the areas of technology
ERP? An empirical study of the Chinese retail industry Int. J. Inf. Manage. 30,
adoption and cloud computing. In the professional
2010, pp. 265–276.
sector, she has over 5 years of work experience in the
[126] D. Zissis, D. Lekkas, Addressing cloud computing security issues, Future Gener.
management information area in banking, telecom and
Comput. Syst. 28, 2012, pp. 583–592.
utilities. Currently she works for one of the major
European operators in the energy sector.