Risk-Benefit-Mediated Impact of Determinants on the Adoption of Cloud Federation

As an emerging trend for maximizing IT resource utilization, cloud federation raises various technical, economic, and legal issues. In order to understand the future of its adoption among cloud providers, it is important to identify which factors can be driving or inhibiting the process. This study aims at closing this research gap and find out the strength of their inhibiting or facilitating factors. After a thorough review of previous studies, factors suggested by relevant studies as determinants of cloud computing are compiled. Among those determinants, the most relevant factors are selected and, then, used to construct a model of hypothesized relationships of the determinants with the perception of risk and benefits of cloud federation, thus with the intention of joining a cloud federation. Data from a total of 300 cloud service providers, consultants, and IT experts were collected through a survey questionnaire. Questions were asked regarding large firms and small firms. The model is evaluated using structural equation modeling. The findings show that, among the six determinants analyzed by the study, flexibility and competitive pressure showed strong positive impacts. Thus, they are considered the major drivers of cloud federation. Furthermore, interoperability, service quality decline, and legal issues could be linked to be strong inhibitors of cloud federation. However, all these determines are strongly mediated by the perceived risk and perceived benefit of cloud federation. The estimated results for cloud providers showed that large cloud providers are attracted to cloud federation due to the potential of offering flexible services, while small cloud providers are driven by competitive pressure to join a cloud federation.