Article Critique on

The Perceived Business Benefit of Cloud Computing: An Exploratory Study

By Thomas Chen, Ta-Tao Chuang and Kazuo Nakatani

Kathmandu University School of Management

Submitted To:

Assistant Professor Mr. Sanjay Pudasaini

Faculty (MIS)

Submitted By:

Bindu Gaire Sharma (20328)

11th February 2021

The article “The Perceived Business Benefit of Cloud Computing: An Exploratory Study”
by Thomas Chen, Ta-Tao Chuang and Kazuo Nakatani seeks to address how businesses perceive
the usage and benefits of cloud computing in their activities and examine the impact of five
factors on the perceived benefit of cloud computing by the businesses. The study is intended to
assess the claimed business benefits of cloud computing with an empirical study and to
investigate how contextual factors affect the realization of such benefits. The abstract of the
paper clearly presents a summary of why and how the study is done and the findings that the
study has generated.

The major objective of this research is to study the benefits of cloud computing services
perceived by the businesses adopting such services and to answer whether factors like type of
cloud computing, firm’s size and value chain activities affect the way businesses perceive
benefits of cloud computing services or not. The research questions and objective are clearly
stated and as cloud computing is constantly gaining popularity in the information technology
industry and among today’s businesses, so the objective is researchable as well.

Recently, service providers offering a wide range of cloud-based solutions to businesses have
emerged into prominence. However, the acceptance and the slow adoption of cloud computing
services shows the need for studies that could further our understanding of the deployment of
cloud computing. Only when businesses gain better understanding of benefits of cloud
computing services and factors that determine such perceived benefits, they might be more
willing to adopt cloud computing services. So the problem is significant enough to carry a formal
research effort.

For this article, the literature review gives a short background on evolution of cloud computing,
its definition and various types of services (SaaS, Paas and IaaS) that are available to business
operating their activities in the clouds. Similarly, some research on business benefit of cloud
computing is also cited by authors. By summarizing the benefits discussed in the extant literature
as reviewed in the article, the authors have considered that cost reduction, enhanced business
capability and increased scalability are three important dimensions of cloud computing. Based on
the research objectives, authors have developed a research model and drawn a conceptual
diagram to clearly reflect each independent variable, dependent variables and the moderating
variables that are used in the study to justify the research objectives. The research hypotheses are
clearly drawn for the all the independent variable and moderating variables. The indicators of the
dependent variable (the benefit of cloud computing) which are business costs saving, improved
business capabilities, and enhanced business scalability are compiled from extant literature and
the source of these indicators are also clearly mentioned by the authors.

The authors have develop a sampling frame consisting four business directories available in
Tiwan. A sample of 7000 companies is randomly chosen from the directories and the subjects
freely chose to answer the questionnaires. Therefore, there are probably sampling problems or
self-selection bias. After excluding invalid responses, the end results of useable questionnaire
were 65. With such a small sample size it is difficult to generalize these findings to the larger
business population. Also, all participants in this study are businesses operating Tiwan and are
predominantly SMEs; this also limits the generalizability of these findings and also may make
the result less representative. It is my opinion that the survey moderators should have reached out
to additional businesses with different size to better represent the total population mentioned in
the study.

This article is an exploratory study as there is not much prior study on similar research objectives
to refer to.  This article intends merely to explore the research questions and does not intend to
offer final and conclusive solutions to existing problems. The research design is used by authors
to provide better understanding of how existing contextual factors affects the realization of
perceived benefits of cloud computing services. However, as exploratory research generally
utilizes small sample sizes the findings of this article are typically not generalizable to the all of
the businesses around the world. The data collection instrument of this study is also developed
based on extant literature and is revised through three rounds for the face validity.

The instrument utilized for data collection is a 5-point Likert scale questionnaire. This scale is
used to assess changes in performance in the different business aspects before and after adopting
cloud computing services. These aspects are mainly related to scalability, cost and capabilities of
the businesses. While the study mainly uses survey as a means to collect data, during the process
of developing the measurement instrument, the authors interviewed three practitioners whose
companies had adopted cloud computing to obtain practitioners’ inputs about the feasibility of
the study and to validate the instrument.

Statistical software SPSS 20 is used to analyze the data. MANOVA, one-way ANOVA and p-
value is used by the authors to determine the impact of cloud computing on business capability,
scalability and cost saving. As authors have stated various hypotheses for the study ANOVA
testis used as is appropriate to determine if there is a statistically significant difference among the
levels of business benefits produced by cloud computing and type of cloud or value chain
activities or size of business. The level of significance is also explained for the data analysis of
the study by the authors.

The results of the study support the main thesis that cloud computing can generate benefits to
businesses but the level of benefit varies depending on other factors, such as areas where it is
adopted in value chain and firm size. The authors have explained every result obtained from the
statistical tools (ANOVA and p-value) used very well. The result for every hypothesis stated in
the study is also explained in detail. Significant results were noted in the results of this study, but
there are limitations to these findings. The limitations of the study are clearly explained and the
author discloses that there might be sampling problem or self-selection bias regarding the
samples taken into consideration of the study. The article also mentions that the sample size is
not ideal as expected because of which results might also be less representative.

The study is exploratory in nature and based on extant literature and observations, the authors
have proposed a research model depicting the relationship between the type of cloud computing
and the benefit, moderating by the firm size and value chain activity. The nature of cross-
sectional data set limits the interpretation to that at one point in time. It might not reveal the
benefit generated from cloud computing as business go through the two phases (technological
revolution and financial capital) of Perez’s Technological Surge Cycle (Perez, 2002). The
authors recommend for longitudinal study to examine such benefits. No other recommendation
has been made for the further studies by the authors in the article. The article allows for
increased understanding of business benefits of the cloud computing services and how such
perceived benefits vary depending on the type of moderating and independent variables
mentioned in the study. With the findings of the study, businesses may gain better understanding
and might be more willing to adopt cloud computing services. As this is an explorative study the
findings of the article cannot be generalized to a wider context or population. So, the findings of
this article are not usually applicable on making practical decisions regarding whether a business
should use cloud computing or not.

References

Chen, T., Chuang, T., & Nakatani, K. (2016). The Perceived Business Benefit of Cloud
Computing: An Exploratory Study. Journal of International Technology and Information
Management, 25(4).

Perez, C. (2002). Technological Revolutions and Financial Capital. Cheltenham, UK: Edward
Elgar.