Discovering and creating business opportunities for cloud services

•This study focuses on how the opportunities for cloud services are detected.•The study develops a framework to detect and exploit cloud-based opportunities.•This study incorporates entrepreneurship theories to extend and enrich IS research.

Cloud computing provides new business opportunities for firms selling or using cloud services. However, little is known about how software firms detect and exploit these opportunities. Based on in-depth qualitative case studies, this study identified two different pathways followed by software firms when they detect and exploit opportunities. In the first pathway, the opportunity is based on an existing problem and need in the market. In the case firms, the opportunity was exploited by adapting the software to the cloud environment. In the second pathway, the opportunity arises from the founders’ prior knowledge and imagination, in the absence of any existing problem or need in the market. In this case, the opportunity was exploited through the features offered by cloud computing. This research contributes to Information Systems (IS) literature by incorporating relevant entrepreneurship theories in such a way as to enrich and extend IS research.