Impact of Cloud Computing Announcements on Firm Valuation

With increasing demand for Cloud Computing services, a growing number of firms are citing business agility and cost savings as motivators for adopting Cloud Computing services. Extant literature does not provide any empirical evidence of value of announcements made regarding the Cloud Computing environment. This paper examines impact of Cloud Computing announcements on firm valuation, using event study methodology. This study explores the market impact of adoption of Cloud Computing on the cloud vendors/providers and customers/adopters. The impact on firm value of the competitors, of the companies adopting Cloud Computing services, is also analyzed. The study shows that there is a significant impact of those announcements on the firm value of the companies. However, it shows a contrasting impact on the customers, vendors and their respective competitors, when analyzed separately.