Cloud Computing as Innovation: Studying Diffusion

Abstract

There are reasons for seeing the impacts of cloud as emerging more slowly and over a much longer time horizon than many commentators are suggesting. One is that a technical innovation, or set of technical innovations like cloud, typically goes through three phases – invention, commercialization and diffusion. By 2013 cloud is still dominantly in the commercialization phase, though diffusion of parts of cloud business services, as with many Internet related services such as eBay and Facebook, could be very rapid. A second reason is that diffusion of an innovation rarely takes place at a steady linear rate. Rather research shows it tends to follow an S-curve, starting quite slowly, needing to demonstrate many attributes, and passing through several phases before being fully adopted [1]. Clearly, cloud will be on a far from frictionless journey towards having substantive impacts on individuals, organizations, sectors and economies. Finally, cloud and its developers and users are on a learning curve which will take considerable time to climb before the sizable impacts anticipated actually materialize. In our view, there are near term developments involving a relatively fast take-up of new services, together with supportive technical and contractual advances. Here the cost imperative will dominate, but organizations and providers will mature in their ability to manage services and learn better. This will enable them to move to more innovative uses of cloud computing at the organizational level. We see this learning strand as accelerating over the next ten years. Our findings in this paper draw from research that was conducted through 2011-13. This research included a survey of more than one thousand business and IT executives and 56 interviews between 2011-2 supplemented by 20 further interviews October-February 2013 (to be completed) with key international players in the cloud computing ecosystem. We collected insights from cloud providers, system integrators and users of cloud services.