Colocation as a Hybrid ICT Sourcing Strategy to Improve Operational Agility

Abstract

Fast access to communication networks and the availability of high-performance information and com-munication technology (ICT) infrastructures is indis-pensable for accelerating business transactions. Yet with increased environmental volatility, companies need to become more agile in identifying and responding to market- and technology-based challenges. Accordingly, a responsive and high-performance ICT infrastructure remains a top priority for firms. Thus, new ICT sourcing strategies may lead to significant competitive advantages, especially in dynamic business environments. This article analyzes a hybrid ICT sourcing strategy called colocation that allows firms to operate their own ICT resources in facilities of special-ized data center providers. Grounded in the theory of dynamic capabilities, we theorize and empirically ex-amine how colocation and top management support enable firms to improve their operational agility in the presence of environmental turbulence.