Cloud computing is becoming a powerful driver of national-level technological and economic transformation by providing firms access to world-class ICT services. However, the adoption of cloud services faces challenges that require governments to intervene at early stages of industry-level adoption with targeted promotion strategies. This paper investigates the key drivers of cloud service adoption by employing a combination of theoretical and empirical approaches that complement one another. Regarding the theoretical approach, this study develops a dynamic model demonstrating that an effective promotion strategy is essential for helping industries achieve a high equilibrium level of cloud service adoption, in particular by leveraging network effects. For the empirical approach, our regression analysis on cross-country data provides evidence that supports insights from the dynamic model, including the importance of network effects in driving cloud service adoption. Further, the empirical findings demonstrate the positive effects of ICT infrastructure quality, IT skills and experiences, openness to international trade, and urban population size on country-level cloud service adoption, while relative cost of cloud services and pervasiveness of software piracy are significant inhibitors. The paper also identifies heterogenous trends in cloud service adoption across geographic country-clusters. The findings offer implications for both theoretical development and policy practice.