the variance in cloud-deployment success among our survey participants,
senior IT managers. This is another
indication of their importance in the
cloud-computing model, where maximizing the benefits of the cloud is essential for operational performance
and business success.
Sources of advantage
While cloud computing should deliver
benefits to any client organization, the
challenge of differentiating an organization and gaining advantage depends
on development and use of internal
IT-related capabilities. Organizations
may differentiate themselves despite
applying similar IT solutions when organization-specific capabilities are employed to leverage IT resources. IT cost
reductions, IT economies of scale, and
performance (deployment success) are
expected outcomes when technical,
managerial, and relational capabilities
optimize cloud implementation.
Despite implementing uniform
information technologies, organizations can create competitive advantage
through superior interorganizational
relationships with their cloud providers. The related trust would lower the
cost of negotiations, as well as the
possibility of related conflict. It would
also enhance cooperation between the
organization and the vendor by creating favorable conditions for constructive exchange and shared governance.
Genuine cooperation and the coordination of activities should encourage
the organization and its cloud provider
to explore new ideas, increasing the
likelihood of achieving shared goals.
In contrast, a lack of trust indicates
a heightened sense of suspicion that
would impede effective exchange of
information. Such conditions would
cause the client organization to rethink its vendor relationship and second-guess its own cloud-deployment
Organizations with rigid IT infra-
structure generally lack the ability to
fully implement a cloud strategy. IT
managers who lack business knowl-
edge and IT understanding of how to
exploit cloud technologies or integrate
a cloud solution across business units
would likewise hinder successful de-
ployment. However, an organization
without effective technical and mana-
gerial capability might achieve perfor-
mance gains and IT cost reduction but
not competitive advantage.
Cloud computing services can provide IT functionality to small and
large organizations alike. Organizations throughout the industrialized
world, challenged by competition and
government regulation, show strong
interest in cloud computing to help
reduce operating costs and increase
business agility while addressing their
computing and data-storage needs. 18
While many benefits are associated
with cloud computing, one key to success is for the client organization to
use its IT-related capability to leverage
cloud-provided resources. Organization-specific IT capabilities, coupled
with homogeneous information technologies, promise a differentiated IT
environment that can be a source of
competitive advantage. Management
and market factors being equal, organizations that develop and strengthen
their IT-related capabilities are likely
to realize greater value from their
investment compared to organizations that implement only a cloud resource.
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Gary Garrison ( firstname.lastname@example.org) is an
associate professor of information systems management
in the Jack C. Massey graduate school of Business of
Belmont university, nashville, tn.
Sanghyun Kim ( email@example.com) is an associate professor
of management information systems in the school of
Business administration of Kyungpook national university,
Robin L. Wakefield (robin_ Wakefield@baylor.edu) is an
associate professor of management information systems
in the hankamer school of Business of Baylor university,
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