Against the backdrop of new economic realities, one of the larger forces that is affecting businesses worldwide is cloud computing, whose benefits include agility, time to market, time to capability, reduced cost, renewed focus on the core and strategic partnership with the business. Cloud computing can potentially transform a majority of the information technology (IT) industry into services oriented IT organizations or simply IT as a Service (ITaaS), changing the way software and hardware are designed and purchased (Armbrust et al., 2009). Cloud computing model promotes availability apart from other benefits and is comprised of 5 essential characteristics like on-demand self-service, broad network access, resource pooling, rapid and responsive elasticity and measured service (Perez et al., 2009). Effectiveness of IT is known as the degree to which IT can effectively and efficiently deliver and/or integrate with the technology based services and solutions. Strategic alignment is viewed as a bridge that links IT to different viewpoints on other domains of an organization and its environment (Avila, Goepp, & Kiefer, 2009). This study is a modification and an extension of Ness’s (2005) research, replacing IT flexibility with cloud adoption and extending to all IT organizations irrespective of their type and size. The study findings provided statistical evidence that cloud adoption has a very strong positive correlation on IT effectiveness and its relationship is much higher than the combination of the interaction of cloud adoption and strategic alignment (SA) which in turn has a higher correlation than the individual relationship of SA on IT effectiveness.