Size Matters for Cloud Capability and Performance

Most research on cloud computing has been conducted in large firms. However, small, and medium enterprises (SMEs) constitute the majority of organizations worldwide. SMEs differ significantly from large firms and organizational size is a significant contingency variable in the organizational context. Accordingly, we examine how SMEs and large firms differ in leveraging cloud capabilities to achieve performance. We suggest that Business Scalability mediates the link between Enterprise Cloud Capability and a firm's Business Performance. We further hypothesize that the positive effect of Enterprise Cloud Capability on Business Performance is stronger for SMEs as they benefit more from Business Scalability than larger firms. We collect primary matched pair survey data from 147 small and large firms in India to test our research model. Empirical analysis using partial least squares provides support for our primary thesis that SMEs and large firms derive value from Enterprise Cloud Capability through different value creation pathways.