Reducing Information Asymmetry in Cloud Marketplaces

  • Authors:
  • Vladimir Stantchev;Gerrit Tamm

  • Affiliations:
  • SRH University Berlin, Berlin, Germany;SRH University Berlin, Berlin, Germany

  • Venue:
  • International Journal of Human Capital and Information Technology Professionals
  • Year:
  • 2012

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Abstract

Cloud Computing is emerging as a predominant paradigm for obtaining and providing computing functionality in the enterprise. Organizations that are planning to use cloud computing offerings struggle with the question "How do I choose the right offering?" Cloud offerings exhibit a variety of pricing models and different levels of service and functionality. In this article the authors define first Cloud Computing in the context of IT Governance. Then they set criteria to compare different offerings at the level of Software-as-a-Service SaaS. This is an important precondition for the reduction of the verifiable information asymmetry and uncertainty in the cloud market. Besides deficiencies on the supply side, regarding configuration, display and communication of service bundles, the limited knowledge of potential buyers is main reason for the modest adoption. The authors apply strategies derived from information economics to reduce this asymmetry by integrating information substitutes in the service marketplace description, thereby transforming experience and credence qualities into search qualities.