Paper Example on SMEs Perspective on Cloud Computing Adoption in Turkey

Abstract

This research explored the perspective of small and medium-sized enterprises in Turkey on cloud computing. The study analyzed the factors perceived as the benefits of cloud computing and the barriers to its adoption in small and medium-sized organizations in Turkey. It also identified and discussed the cloud computing policies which are aimed at fostering SME's adaptability to clouds as well as the current state of cloud computing in SMEs in the country. The research employed mixed research methods. Quantitative data was collected through survey in which participants from 32 organizations completed an online questionnaire. Qualitative data was mainly collected through content analysis. The study found that the factors that influence the adoption of cloud computing can be grouped into three main categories namely, external factors, internal factors, and technological factors. It also came out that SMEs in Turkey weigh the benefits they can get from cloud computing against its disadvantages before making the decision to adopt it. There are many reasons why organizations adopt cloud computing but the leading among them is the need to save on the cost of operation. On the other hand, data ownership and protection concerns is the first of many reasons why SMEs are reluctant to adopt cloud computing. The research concluded that SMEs in Turkey do not just hold negative or positive views on cloud computing, but make adoption decisions based on consideration of benefits and disadvantages. Where the benefits outweigh the accompanying barriers to adoption, an SME is likely to adopt cloud computing and vice-versa.

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Introduction

Background

The economy of each country consists of many companies, and most of these are normally small and medium-sized enterprises (SMEs). SMEs make a significant contribution to the labor market and the Gross Domestic Product (GDP) of countries. As they establish new employment opportunities and provide balanced support to social and economic development, SMEs contribute to economic growth (Hosseini, Fallon, Weerakkody, and Sivarajah, 2019). Hence, they play a crucial role in every market. Small and medium-sized enterprises (SME's) constitute approximately 92.9% of the enterprises in Turkey, and offer 78% of all employment. They also consist of 55% GDP and 50% of the investment summation (Caprio Jr., 2016). As such, the development of new strategies and systems that can improve the productivity and efficiency of SMEs is beneficial for both the economy and the SMEs. One of the approaches that can be used to improve the efficiency of SMEs is the adoption of suitable information and communication technologies (ICT) (Tan, Chong, Lin, & Eze, 2009).

SMEs have many challenges because of their structure and size. The leading challenge of such companies is financial limitation. Unlike large firms, small companies have a lower capacity to bear risk and cost of implementing new innovations. SMEs are very conscious about costs, and they strive to keep their expenditures in check. While incorporating new technologies help them gain a competitive advantage, it is costly to adopt. Any ICT investment comes with training costs, operation costs, and fixed costs. Besides, the actual cost of IT projects turns out to be higher than the planned estimate in most cases (Tan et al., 2009). The risk and high cost related to IT projects discourage SMEs from easily investing in new technologies or adopting it.

Cloud computing is a relatively new innovation that can enable SMEs to overcome problems like risk and cost management. Although cloud computing has been defined variously by different scholars, it is defined in this study as a computing model that delivers the computing resources to clients over a network such as the internet. It allows companies to access the available services and resources on-demand basis. That means they can access and use the computing resources anywhere and anytime, provided they have internet. With cloud computing, it is no longer necessary to deploy systems and applications on-premises. It eliminates the need for customers to develop or install in-house computing resources. Over the network, the customers can access various computing resources, including services, applications, storage, services, and networks. A major difference between cloud computing and on-premises systems is that users do not have to operate the actual technology. They only use and pay for the computing resources that they need. Through this, the cost and risk of managing technology are significantly reduced. Hence it benefits the SMEs specifically. Cloud computing reduces the operation and maintenance costs, project risk, and the investment cost for SMEs (Khan, Zhang, Khan, & Chen, 2011).

Another advantage of cloud computing over traditional computing is its model of payment. Unlike the in- house systems, cloud computing offers the pay-as-you-go model, which enables users to only pay for the resources or services they have used. Organizations have access to the most sophisticated IT Services without necessarily having to invest huge capitals in advance. No upfront payment is needed to purchase, install, or license the system. Also, it is not the responsibility of the users to maintain or upgrade software and hardware applications. Despite the many advantages of cloud computing for companies, it also has some setbacks. Other researchers have discussed issues such as availability reliability and security of the cloud. Legal concerns also exist, especially regarding the ownership of the data and data centers, and the location where they are saved. Most of these issues and concerns can be resolved by signing a comprehensive Service-Level-Agreement (SLA).

Arguably, cloud computing in itself is not a new technology butter combination of old paradigms such as virtualization and grid computing. However, it is regarded as an innovation since it provides a new computing method that integrates the technologies that already exist (Karadag, 2017). Like other innovations, the decision to adopt cloud computing involves other factors than just costs and benefits. In the field of information systems, adoption of technology is one of the greatest research streams. Therefore many theories and models have been put forward to try and explain the factors that determine the adoption of new technologies. However, few studies have investigated the process of adopting cloud computing. Accordingly, even fewer studies have focused on the adoption of cloud computing by SMEs. Identity of research conducted in this area attempt to explore cloud computing, and determine the advantages and disadvantages of adopting cloud computing.

To maximize the benefits of cloud technology to SME's, most countries are initiating new policies to facilitate the establishment, expansion, development, and protection of small and medium-sized enterprises (SMEs). Cloud computing policies play a significant role in complementing SME's, not only to facilitate competitiveness in the new innovative era but also achieve effective and sustainable economic growth (Karadag, 2017). Cloud computing migration is very significant since it is a crucial source for competition if the small and medium-sized companies embrace a cloud-oriented manner of accessing and organizing their technological infrastructure. Therefore, the designed policies for clouds focus on enhancing a migration pathway that relies on innovation and agility. For the same reasons, it is essential for Turkey to establish and initiate new policies which target SME's; and academic research plays an influential role in this.

Overall, cloud computing has emerged to be among the most modern topics under discussion that has not been explored fully (Rittinghouse and Ransome, 2017). Although various researchers have examined the implementation of cloud computing, the espousal factors in the Turkish private segment has not been thoroughly researched. Therefore, the key purpose of the current study was to make a significant contribution to the awareness concerning cloud computing through exploring the implementation aspects of cloud computing in small and medium scale companies in Turkey that are also pertinent to other countries that share the economic levels.