How Cloud Computing Enhances Competitive Advantages: A Research Model for Small Businesses

Cloud computing is perceived as the next step in the evolution of information technology resource distributed systems with the capability to enable businesses and users to access applications from anywhere in the world on demand. Although the term “cloud computing” becomes famous, the research of cloud computing is inadequate and limited to technical aspects only. It is still not clear to businesses how cloud computing can help them improve their competitive advantages. The purpose of this research is to develop a research model of cloud computing from managerial perspective and focus on small businesses. We use the resourced based view theory to propose a research model which explores the influence of cloud computing related resources on a small business’ competitive advantages. Cloud computing is an emerging computing paradigm which promised to provide opportunities for delivering a variety of computer applications in a way that has not been experienced before (Sultan, 2009). With cloud computing, businesses and users can have access to applications all over the world through any web browser. We can imagine a cloud computing system as a virtualized computer system that contains all software and applications needed for businesses. Cloud computing provides businesses with a fundamentally different model of operation in which the service providers are responsible for hard parts in using software: installation, upgrade, maintenance, backups, failover functions, and security. As a result, the users of cloud computing services will see the increased reliability and cost decline due to economies of scale (Educause, 2009). They don’t need to invest in their own servers or employ staff to take care of them. Instead, they just need to pay for the services on demand. These advantages are important for businesses, but they become more crucial for small businesses who have limited resources. Using cloud computing services will save them a lot of time and money and makes their operations more effective (Quittner, 2009)