Impact of Cloud Computing Adoption on Firm Stock Price – An Empirical Research

In this paper, we investigate how cloud computing adoption impacts publicly traded 26 cloud&adopting companies\u27 stocks. In an effort to perform a valid assessment of a firm\u27s cloud adoption initiatives, we also evaluate the stocks of 26 companies, which did not adopt cloud computing and operate in the same industry with similar market capitalization. Our study differs from the previous studies in the area because it uses Fama&French three factor model to d erive the stock abnormal returns for both adopters and non&adopters. Furthermore, given the announced risks of cloud computing in the literature, we analyzed the stock risk between adopters and non&ad opters. Our preliminary analysis implies that businesses adopting cloud computing experience positive cumulative abnormal returns during the time the event was announced. Our research also indicates that both cloud adopting and non&cloud adopting companies suffer from higher stock risk during the announcement but this risk is not statistically significant

Impact of cloud computing adoption on firm stock price - An empirical research

In this paper, we investigate how cloud computing adoption impacts publicly traded 26 cloud-adopting companies\u27 stocks. In an effort to perform a valid assessment of a firm\u27s cloud adoption initiatives, we also evaluate the stocks of 26 companies, which did not adopt cloud computing and operate in the same industry with similar market capitalization. Our study differs from the previous studies in the area because it uses Fama-French three factor model to derive the stock abnormal returns for both adopters and non-adopters. Furthermore, given the announced risks of cloud computing in the literature, we analyzed the stock risk between adopters and non-adopters. Our preliminary analysis implies that businesses adopting cloud computing experience positive cumulative abnormal returns during the time the event was announced. Our research also indicates that both cloud adopting and non-cloud adopting companies suffer from higher stock risk during the announcement but this risk is not statistically significant

AMCIS - Impact of cloud computing adoption on firm stock price - An empirical research

In this paper, we investigate how cloud computing adoption impacts publicly traded 26 cloud&adopting companies\u27 stocks. In an effort to perform a valid assessment of a firm\u27s cloud adoption initiatives, we also evaluate the stocks of 26 companies, which did not adopt cloud computing and operate in the same industry with similar market capitalization. Our study differs from the previous studies in the area because it uses Fama&French three factor model to d erive the stock abnormal returns for both adopters and non&adopters. Furthermore, given the announced risks of cloud computing in the literature, we analyzed the stock risk between adopters and non&ad opters. Our preliminary analysis implies that businesses adopting cloud computing experience positive cumulative abnormal returns during the time the event was announced. Our research also indicates that both cloud adopting and non&cloud adopting companies suffer from higher stock risk during the announcement but this risk is not statistically significant

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 costsavings as motivators for adopting Cloud Computing services. Extant literature does not provide any empirical evidence ofvalue of announcements made regarding the Cloud Computing environment. This paper examines impact of CloudComputing announcements on firm valuation, using event study methodology. This study explores the market impact ofadoption of Cloud Computing on the cloud vendors/providers and customers/adopters. The impact on firm value of thecompetitors, of the companies adopting Cloud Computing services, is also analyzed. The study shows that there is asignificant impact of those announcements on the firm value of the companies. However, it shows a contrasting impact on thecustomers, vendors and their respective competitors, when analyzed separately

How cloud computing impacts stock market prices

Cloud computing is an evolution of computing technology and reflects a shift in the way it is delivered to businesses and individuals. Enterprises can significantly lower their cost of ownership, reduce time to value and faster adapt to changing needs in a globalized economy. Despite research and practice predict productivity increases and cost savings when migrating to the cloud one question remains unanswered: Does the adoption of cloud computing increase the market value of the firm? We try to answer this question by applying the event study methodology on companies that recently announced the deployment of cloud computing. Overall, we find significant positive abnormal returns. We find that investors specifically reward innovative and strategically motivated adoption of cloud computing. As a key implication of our results, we recommend in particular IT executives in large companies within the service industry to reassess their portfolio and foster the adoption of strategic and innovative cloud services

Understanding The Impact Of IT Service Innovation On Firm Performance: The Case Of Cloud Computing

Recently we have witnessed a new kind of IT advancement. It is a phenomenon where various types of IT capabilities are centralized into data centers to ensure that such resources are available wherever and whenever they are needed. Cloud computing is the latest version of IT service practice reflecting such new IT trends. Although cloud computing is considered a paradigm shift of IT service design and delivery in IS communities and intrigues large amounts of interest from business entities, few studies have examined this new IT and business phenomenon. To better understand the organizational application of cloud computing, the current study aims to investigate economic payoff from cloud computing investment. Employing the event study methodology, we analyze 183 firm-level announcements regarding cloud computing adoption. The results indicate that cloud computing adoption announcements are associated with positive increases in the market value of the firm. In addition, we identified differences in the effect of cloud computing adoption on market returns according to strategic adoption intention, firm size, and industry sector. These results can be used as useful references for the firm’s decision-making about whether, when, and how to adopt cloud computing to maximize its business value

Assessing A New IT Service Model, Cloud Computing

Recently we have witnessed a new kind of IT advancement. It is a phenomenon where various types of IT capabilities are centralized into data centers to ensure that such resources are available wherever and whenever they are needed. Cloud computing is the latest version of IT service practice that reflects such new trends in IT. Although cloud computing is considered a paradigm shift of IT service design and delivery in IS communities and generates large amounts of interest from business entities, few studies have examined this new IT and business environment. To better understand the organizational application of cloud computing, this study aims both to investigate economic payoffs from cloud computing investment and explore cloud computing adoption within the firm. This study is one of the first of its kinds to assess this new IT service model (i.e., cloud computing) using empirical validation. The proposed study can make contributions to the IS literature by (1) extending the boundary of the IS literature by reflecting the new trend of the IT industry; (2) continuing the debate about business value of IT; and (3) establishing a theoretical framework for cloud computing adoption, which can be applied to further studies on cloud computing

The Endogenous Market Structures Approach. A Non-technical Survey with Applications to the Crisis and Future Scenarios for the New Economy

The EMSs approach to macroeconomics introduces strategic interactions and endogenous entry decisions in the analysis of aggregate phenomena as business cycle, international trade and growth. This survey provides a non-technical discussion of the applications of the EMSs approach to positive and normative issues, and relates these with recent debates on the current recession, future scenarios for glabalization, policymaking and the New Economy.

Do Shareholders Value Green Information Technology Announcements?

Using the natural resource-based view (NRBV) and signaling theory, we conducted an event study using the Fama-French four-factor (FFM4) model to determine how shareholders react to company announcements about adopting information technology (IT) to address environmental issues. We found that green IT announcements generate positive abnormal returns and increase share trading volume. Initiatives that use IT to support decision making (ITDSS) cause positive stock market reactions. Firms with good environmental performance records enjoy positive market returns from ITDSS and direct IT assets and infrastructure (ITASSETS) announcements. In contrast, shareholders react negatively to announcements regarding sustainable products and services (SPDTSVC). Combining the NRBV with signaling theory provides deeper theoretical insights than either theory alone. The findings could serve as the basis for further research and theory development on the different types of green IT and impacts on market value. The results help explain how firm characteristics and different types of green IT announcements impact market value, and they have significant implications for how firms plan and allocate their resources to support green initiatives

The silver lining: cloud computing and small and medium enterprises

This paper shows how Australian businesses can get the most out of one of the biggest global innovations: information communications technology. Overview: Innovation – the successful application of new ideas – drives Australia’s productivity. Australia’s biggest innovation opportunity lies in creatively exploiting global innovations. One of the biggest of these is information and communications technology. Small and medium enterprises (SMEs) are an engine of the Australian economy. They employ two-thirds of Australian private sector workers and contribute half of Australia’s private sector GDP. Yet many SMEs have low productivity. Innovations may spread slowly to many smaller firms because they lack the capital or market intelligence that large firms can access. Online innovations – including mobile devices, e-commerce, and cloud computing – offer opportunities for firms of all sizes to become far more productive. This paper explores issues raised at a workshop run by Grattan Institute and Google on how policymakers and business can accelerate the spread of cloud computing among SMEs. It uses cloud computing – the delivery of on-demand information technology services over the Internet – as a case study for how online technologies can benefit smaller firms. Cloud computing can help level the playing field for smaller firms. It allows them to access sophisticated IT services that were previously out of reach. For example, it can allow them to manage and monitor their sales, operations and finances in real time. The cloud also offers capabilities that were previously unavailable to firms of any scale. For example, it allows multiple users to access applications or update documents at the same time from mobile devices. Cloud computing makes it easier for small firms to take new ideas to market. Firms that use cloud computing report more growth in revenue and profit than others do. But many Australian SMEs say they do not use cloud services. Many are not aware of the benefits or believe they do not have skills to capture them. Some are concerned about transition costs, data security and privacy. Networks are too slow or unreliable for cloud services in some areas of the country. Workshop participants agreed that government and industry can remove obstacles to the use of cloud computing and help SMEs capture its benefits. The industry itself should lead the education of SMEs on the case for cloud computing. Yet government can:  Choose policy settings that promote broader productivity growth and innovation;  Ensure interaction with government over the internet is the default for all businesses;  Provide an appropriate policy environment for investment in broadband networks that meet the needs of small business. Information technology’s contribution to productivity is just getting started. Small and medium enterprises should get on board