Analysis of the Total Cost of Ownership for Cloud Computing Technology Adoption: A Case Study of Regional Municipal Government Sector

One of the key drivers of cloud computing adoption is usage-based IT service delivery alternative to on premises IT infrastructure. Existing research supports the role of cloud computing for cost savings. We employed a mixed-method two-staged study to investigate the total cost of ownership of cloud computing in the local government sector of Queensland, Australia. The first qualitative study included 21 in-depth interviews of IT managers to understand the cost elements associated with cloud computing. This was followed by a quantitative study that analysed survey data collected from 480 IT staff across 47 local government organizations to investigate the impact of specific cost elements on cloud computing adoption. We found that cloud computing is perceived to save costs and more specifically for IT capital investments. However specific cost elements for training and operational costs may not reduce as expected. Research findings may assist to make investment decisions on cloud computing adoption.

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