The Value of Cloud Computing to Businesses: A Literature Review (Thesis Sample)

The Value of Cloud Computing to Businesses: A Literature Review Student’s Name Affiliation Course Number and Name Instructor Due Date The Value of Cloud Computing to Businesses: A Literature Review Background Cloud computing describes a service model in information technology that offers on-demand services to customers via a network in a location, self-service, and device independence mode. Therefore, in comparison to traditional information technology services, cloud computing benefits businesses with flexibility, data concentration, pay-per-use, ubiquity, and resource-sharing features (Gao, 2017). In particular, this technology changes how businesses buy and design hardware and software. Notably, Chandrasekaran (2015) determined that the use of cloud computing by private and public ventures has increased. This change is attributed to the technology’s perceived value. Kumar and Vidhyalakshmi (2018) note that cloud computing has the potential to promote business agility. Thus, enterprises using the technology can easily adapt to changing technological needs, collaborate with others, and manage critical data. As a result of introducing business flexibility, companies offer more services using a shared pool of computing services. Presently, some of the large corporations like Microsoft, Amazon, and Google leverage the potential of cloud computing. These businesses access IT tools and applications that allow them to meet their market demands (Dečman and Vintar, 2013). As computing capabilities increase, businesses are able to collaborate with others, share information and create new products. Notably, by shifting from traditional IT to cloud platforms, companies increase value in their production lines (Dečman and Vintar, 2013). This value makes it possible for firms to leverage network services, applications, and data by collaborating with different partners. In that way, Mahmood (2014) observes that managers share insights on how to improve their productivity to develop competitive strategies. At the same time, businesses learn how to manage the improved flexibility, and resource sharing features of cloud computing, which makes the technology improve the capacities of a business. Transformative Mechanisms The utilization of cloud computing involves three key processes; decoupling, recombination, and platformization. These mechanisms are delivered using the capabilities of one technology, where each process has distinct effects on a business (Loske & Buxman, 2018). First, decoupling entails the independence of services where service interfaces are used to effect internal changes without compromising system functions. Mhouti et al. (2017) note that decoupling begins at the infrastructural level in the implementation of cloud computing. Therefore, using virtualization techniques, the applications used by businesses operate independently of their physical resources. For instance, resource-intensive applications operate from virtualized layers, which use several physical instances. In that way, Iosup et al. (2011) add virtualization allows businesses to scale their resources, which is one of the desirable traits of cloud computing. Hence, the technology is widely used because it promotes decoupling at the component level. Such is the case in distributed and monolithic systems. Second, platformization enhances decoupling by creating access and opportunities for interaction services focused on a system of stakeholders, customers, and complementors (third-parties). According to Lynn et al. (2020), through platformization, businesses access different service models like IaaS, PaaS, and SaaS. These models allow companies to realize different capabilities to provide infrastructural, service, and application services. Hence, Femminella et al. (2018) determined that through platformization, firms using cloud computing can meet their unique needs. For example, they can offer better service quality, variety, and operational flexibility. The concept of platformization allows businesses like Amazon to utilize underused virtualization at the resource layer. Similarly, large data handlers use cloud computing to realize endless opportunities, and hence scale their services (Femminella, 2018). For instance, PaaS service providers like Heroku and Google App Engine use cloud computing to offer more services, and design new applications using reusable components. Third, recombination as a transformative mechanism occurs when the innovation potential of a firm is created by combining and integrating different cloud services. Kim (2015) note that this process occurs within the technical layers of cloud computing. For instance, third-party companies use IaaS platforms to provide different resources in a market where users can choose the configurations they need for their businesses. Therefore, according to Chandrasekaran (2015), PaaS has created an API market at the component layer of cloud computing. As a result of this convenience, cloud service providers use platforms such as IBM Bluemix and Amazon AWS to increase value to their components. Hence, through recombination, businesses can create cross-platform services using APIs. However, to reduce application development time, Kumar and Vidhyalakshmi (2018) observe that firms use open services to create appropriate solutions for their clients. In that case, application vendors use the application layer of cloud computing to create a marketplace where third-party firms can create endless innovation opportunities. The decoupling, recombination, and platformization mechanisms help to transform the information technology sector. Since the introduction of cloud computing into the IT industry, Dečman and Vinta (2013) observed that the technology is perceived as a mechanism of generating value. Nonetheless, IT value can result from the creation of dimensions of IT efficiency. Such include reducing the cost of business operations, starting new businesses, and increasing the effectiveness of organizational processes (Dečman & Vinta, 2013). In that case, cloud computing offers value to businesses by decoupling resources to allow IT service providers to benefit from economies of scale. As Loske and Buxman (2015) state, recombination makes it possible for third-parties to create applications using the best cloud components and integrate the products with their partners’. Such development helps to grow the value chain by enhancing IT value to businesses (Loske & Buxman, 2015). Similarly, platformization allows organizations using cloud services to access an inexhaustible market. Thus, such access plays a key role in solving organizational needs. According to Badger (2012), decoupling benefits firms through increased accessibility, flexibility, and ubiquity. Thus, ubiquitous access allows staff, clients, and other stakeholders to utilize virtual resources. As a result of this trait, businesses using cloud services become more flexible (Badger, 2012). Gao (2017) explains that the growing trend of the everything-as-a-service model makes it possible for applications to be utilized as services. For example, cloud businesses like YouTube, which offers streaming services demonstrate how cloud computing infrastructure supplies and consumes data services. Thus, Dečman and Vintar (2013) assert this service has changed how consumers interact with the service. On the downside, ubiquitous access affects work-life patterns by changing the behavior of employees, which demands new coping plans (Dečman & Vintar, 2013). However, by creating distributed workspaces for organizations, employees will experience flexible work routines, which counter the negative effect of ubiquitous access. Significantly, platformization allows firms to establish valuable ecosystems via cloud computing by linking different layers. Thus, Mhouti et al. (2017) concluded that this development makes it possible for companies to focus on agility, transparency, and elasticity. However, researchers note that businesses the cloud service models that will support their goals. The ability to define market ecosystems has resulted in the rise of e-platforms, which offer elastic, distributed, and secure computing (Mhouti et al., 2017). Therefore, Weinman (2012) argued that businesses can offer transparent services in real-time. For instance, most governments use cloud computing to improve the delivery of services like filing tax returns, and the issuance of identity cards. In that way, citizens benefit through the fast access to government services and reduced bureaucracy, which causes delays by increasing service time (Weinman, 2012). Such is the case of the Singapore government, which offers over 1,600 and 300 website and mobile services respectively (Ramachandran & Mahmood, 2020). Business Flexibility Businesses benefit from cloud computing by introducing a flexible framework to support service provision and access to shared resources. Therefore, unlike in traditional IT, cloud computing provides the Platform as a Service (PaaS), Infrastructure as a Service (IaaS), and Software as a Service (SaaS) models (Mhouti et al., 2017). According to Badger (2012), the goal is to increase computing power through better and secure access to online applications, and storage in a programmable environment. In that way, researchers argue that businesses can define their areas of focus to determine the most appropriate cloud service to use (Badger, 2012). Resultantly, Femminella et al. (2018) determined that by leveraging the immense potential of cloud computing, researchers note that businesses reduce their security challenges. That is possible because cloud computing uses a flexible architecture. As a result of this flexibility, businesses only need to identify the right vendors to access enterprise management applications to handle different online transactions. With that, they manage voluminous data, risk comp...