Global clouds, local constraints: the dual hedging dilemma of cloud adoption in emerging economies

Abstract The adoption of cloud technology in emerging economies exposes organisations to both macroeconomic and microeconomic risks. At the macroeconomic level, foreign-currency pricing and exchange-rate volatility generate financial unpredictability that conventional project budgeting cannot fully mitigate. At the micro level, the potential failure of cloud providers necessitates meticulous vendor selection and ongoing oversight. Drawing on semi-structured interviews with 16 South African cloud experts conducted in 2021, this exploratory qualitative study examines how organisations separately manage these distinct risk categories. While participants explicitly articulated concerns about vendor viability and foreign-exchange exposure, they did not explicitly articulate the causal interaction between these risks. Synthesising Transaction Cost Economics (TCE), Real Options Theory (ROT), and Risk Society Theory (RST), we propose the Dual Hedging Framework as a novel conceptual proposition. This framework theorises the inherent strategic tension at the convergence of these risks: financial mitigation strategies may inadvertently intensify vendor lock-in, while architectural diversification may complicate financial oversight. The 2025 global hyperscaler outages are referenced as contextual illustrations that demonstrate the enduring relevance of participants’ pre-existing concerns rather than as empirical validation of our findings. The principal contribution is a theoretically grounded framework that equips IT leaders in the Global South with conceptual tools to navigate the paradox of managing integrated financial and technical cloud risks. We position this as an exploratory theorisation requiring further empirical testing rather than a validated predictive model.