Both sides of cloud: more standardized tools and more diverse data analytics

Abstract

Cloud suppliers share many valuable IT resources with startups; however, these suppliers have control over which resources they create, suggest, and share and which third-party technologies fit with their cloud platform. Despite the growing trend of accessing IT through supplier platforms, we know little about how this early-stage resource acquisition decision affects startups’ technology adoption, technological differentiation, and performance. Using panel data on app-developing startups’ web technology adoption, I find that startups using cloud platforms adopt more standardized development tools. Moreover, using cloud-based IT and more standardized tools reduces time spent developing their own tools, enabling startups to cultivate more diverse data analytics capabilities. When paired with fundraising data, my findings paint a picture of high-performing digital startups as standardizing development tools to remedy time-consuming fit issues (i.e., to reduce technology interdependencies and increase compatibility with the cloud platform) and differentiating their startup with more diverse data resources.

Keywords: Data, Startups, Innovation, Technology, Cloud, Competition

JEL Classification: O30