Indian Institute of Management Bangalore
Cloud computing potential to be transformational depends on the ecosystem developed for adoption. Given the evolving nature of the technology, the adoption of cloud comes with many issues which organizations and regulators are grappling with. The on-demand, elastic nature of the cloud based services is projected as being most suitable for Small and Medium Enterprises (SMEs). In this paper, the authors analyze the adoption of cloud computing by Indian SMEs using transaction cost economics. As IT usage by Indian SMEs has not been wide spread, they use the factors and inhibitors of IT adoption by SMEs and compare them with the transaction costs related to cloud computing for SMEs to identify institutional factors required to ensure success of cloud adoption by SMEs.