An Examination of Service Level Agreement Attributes that Influence Cloud Computing Adoption

Cloud computing is perceived as the technological innovation that will transform future investments in information technology. As cloud services become more ubiquitous, public and private enterprises still grapple with concerns about cloud computing. One such concern is about service level agreements (SLAs) and their appropriateness. While the benefits of using cloud services are well defined, the debate about the challenges that may inhibit the seamless adoption of these services still continues. SLAs are seen as an instrument to help foster adoption. However, cloud computing SLAs are alleged to be ineffective, meaningless, and costly to administer. This could impact widespread acceptance of cloud computing. This research was based on the transaction cost economics theory with focus on uncertainty, asset specificity and transaction cost. SLA uncertainty and SLA asset specificity were introduced by this research and used to determine the technical and non-technical attributes for cloud computing SLAs. A conceptual model, built on the concept of transaction cost economics, was used to highlight the theoretical framework for this research. This study applied a mixed methods sequential exploratory research design to determine SLA attributes that influence the adoption of cloud computing. The research was conducted using two phases. First, interviews with 10 cloud computing experts were done to identify and confirm key SLA attributes. These attributes were then used as the main thematic areas for this study. In the second phase, the output from phase one was used as the input to the development of an instrument which was administered to 97 businesses to determine their perspectives on the cloud computing SLA attributes identified in the first phase. Partial least squares structural equation modelling was used to test for statistical significance of the hypotheses and to validate the theoretical basis of this study. Qualitative and quantitative analyses were done on the data to establish a set of attributes considered SLA imperatives for cloud computing adoption