Factors influencing the adoption of cloud computing by small and medium enterprises (SME's) in South Africa

Abstract

Small to medium businesses in South Africa are still sceptical about hosting precious information in the cloud. The concept of the cloud, and the benefits thereof, are not yet widely understood by small business owners in South Africa (Epstein, 2012). The aim of this research was to investigate the factors that influence the adoption of cloud computing by Small and Medium Enterprises (SMEs) in South Africa. The ten factors examined in this research are relative advantage, privacy risk, geo-location, compatibility, trialability, top management support, innovativeness, prior similar experience, competitive pressure and external support. Utilising the Technological, Organisational and Environmental (TOE) model, data was gathered from 325 Small and Medium Enterprises (SMEs) in South Africa using a questionnaire-based online survey. Ten hypotheses were derived and tested by ordinal logistic regression analysis. The research found that relative advantage, complexity, top management support, innovativeness and external support have a significant influence on the adoption of cloud computing. The results provide cloud computing service providers with a better understanding of what influences SMEs to adopt cloud computing.