The Impact of Cloud Computing Adoption on Firm Performance Among SMEs in Palestine: A Machine Learning Approach

The Impact of Cloud Computing Adoption on Firm Performance Among SMEs in Palestine: A Machine Learning Approach

Kawther Mousa, Zenglian Zhang, Eli Sumarliah, Ihab K. A. Hamdan
Copyright: © 2024 |Pages: 24
DOI: 10.4018/IJIIT.338715
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Abstract

This study seeks to identify the driving factors of cloud computing adoption (CCA) among SMEs, and examines the extent to which CCA shape SME performance. Data was gathered from 212 Halal SMEs in Palestine. This study uses a two-phase investigative method to test the research model through integrating structural equation modeling (SEM) and machine learning. SEM findings show that perceived benefit, facilitating states, server location, perceived cost, upper management support, perceived quality, and cloud providers' support significantly affect CCA. Besides, the article verifies that CCA positively shapes SMEs' performance. Machine learning findings unravel perceived benefit as the strongest determinant of CCA. This study is an initial attempt to develop a conceptual framework that hypothesizes the links between technological-organizational-environmental (TOE) factors and SMEs' intent for CCA in Palestine and provides empirical evidence regarding these links.
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Introduction

Digital transformation is a vital determinant of the achievement and permanence of industries (Sumarliah & Al-hakeem, 2023; Sumarliah et al., 2023b). Radically transforming industrial situation and fantastic business race have pushed small and medium-sized enterprises (SMEs) to implement many high-tech innovations like artificial intelligence and internet of things (Hansen and Bøgh, 2021), blockchain (Hamdan et al., 2022a; Sumarliah et al., 2022a; 2023a), advanced robotics, cybersecurity, big data, and especially cloud computing (Somohano-Rodríguez and Madrid-Guijarro, 2022). Nowadays, the Coronavirus disease (COVID-19) pandemic has powerfully altered the global trends (Sumarliah et al., 2021a; 2021e), such as the rapid growth of e-commerce industry (Sumarliah et al., 2021b; 2022b; 2022c), making the cloud-empowered e-commerce platforms more favored to traditional system as they will reduce operational and maintenance costs, capital budgets, and resource usage (Al-Shourbaji and Zogaan, 2021). SMEs in industrial sector growingly face digital transition challenges and a swift to cloud-enable resolutions (Kaymakci et al., 2022). Public and private sectors have become more aware of cloud computing (CC) because of the highly regarded joint networks linking individuals and organizations across the globe (Neicu et al., 2020). CC delivers a state-of-the-art industrial framework for the on-demand, prevalent, and convenient entree to the virtual and allocated means like services, networks, applications, storage, and servers (Daniel and Momoh, 2021). CC service technology encompasses (i) Infrastructure as a Service with computing and storage as its emphasis, (ii) Software as a Service with software application as its core; and (iii) Platform as a Service, which supplies the devices to build and accommodate web applications (Tsai, 2021).

CC enhances firms’ capability by delivering facilities on a pay-per-usage base, which enables companies to support the frequency of using technological supplies in line with the existing requests (Neicu et al., 2020). Industry 4.0 has caused automation and digitization in manufacturing and operations; thus, CC adoption has converted current business systems, offering companies with further productivity, flexibility, and agility (Sharma and Sehrawat, 2020). CC supports companies to alter traditional industrial framework to service-oriented and innovative implementations (Wang, 2022), and increase successful team creativity and performance (Zou and Jian, 2022). As CC offers great prospective advantages, companies are hastening to adopt and implement it in business activities and setups (Albelaihi and Khan, 2020; Bello et al., 2021; Lutfi, 2022).

Compared to big companies, SMEs have fewer resources (Saratchandra and Shrestha, 2022) financial ability to use technologies and are more cautious about investing in technologies (Faasolo et al., 2022; Chau et al., 2020), which does not enable them to build information and communication technology (ICT) supplies such as software and hardware by internal development and research unit. Thus, SMEs usually rely on external sources (Saratchandra and Shrestha, 2022) such as outside ICT experts to get their awaited results. CC technology opens chances for SMEs to use technological innovations through rent payment, which formerly were high-priced (Neicu et al., 2020). CC technology has been an improved management device that increases SMEs’ performance and ability to stay competitive with bigger companies (Sayginer and Ercan, 2021).

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