Can Ireland be the European capital of cloud computing?
Pat Howlin, head of ICT at IDA Ireland. Ireland is punching above its weight in attracting the market leaders in cloud computing to locate in the country
With frequent jobs announcements in the tech arena, Ireland is capturing more than its fair share of global cloud investments. John Kennedy talks to IDA Ireland’s head of ICT Pat Howlin.
Aside from the weather, Ireland has plenty of reasons for believing it is the home of the cloud - cloud computing that is.
The country has been steadily growing an ecosystem of major cloud computing brands - from both existing multinationals based in Ireland since the 1980s and 1990s, and new start-ups emerging from Silicon Valley.
There are many reasons for this - Ireland has the infrastructure in terms of data centres and electricity, as well as the skills needed to grow cloud computing businesses.
The cloud computing market will be worth €207bn worldwide by 2016, according to Gartner. IDC estimates that spending on public and private IT cloud services will generate nearly 14m jobs worldwide by 2015. More than half of these will be in small and medium-sized firms.
Infrastructure-wise, in addition to more than 23 data centres dotted around Dublin City, major data centres purpose-built for the cloud are being constructed in west Dublin. These include software giant Microsoft investing $1bn to build a major data centre in Clondalkin that will be home to the majority of its cloud computing activities for EMEA. In March,Microsoft revealed it is spending a further $130m to expand the Dublin data centre, creating 400 jobs.
Right next door, Google is building a new €75m data centre in west Dublin, which will create 200 jobs for the building and renovation, and 30 jobs for the management of the facility.
US data centre provider Digital Realty Trust has acquired a 10-acre site in west Dublin that will be capable of supporting a massive 193,000 sq-foot data centre requiring 11.5 megawatts (MW) of electricity.
Also in the area is TelecityGroup, which operates three carrier-neutral data centres in Dublin, with a combined capacity of more than 5,000 sq metres and 5MW of customer available power. Last year, TelecityGroup acquired Irish data centre player Data Electronics for £87.6m.
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€207bn: Estimated value of the cloud computing market by 2016
14m: Number of cloud computing jobs that could be generated worldwide by 2015
€500m: Costs that could be taken out of the Irish economy by deploying cloud technology
9,600: Number of jobs that could be created in Ireland through opportunities in cloud
The data centres are a key draw for a raft of software companies that have flooded into Ireland over the last few years. In the past year alone, Amazon has revealed plans to create 100 new jobs in Dublin to support its cloud growth along with cloud security player Total Defense, which is also creating 100 jobs. In Galway and Dublin, SAP is creating 100 jobs at a new cloud support centre.
HP is adding 280 new jobs in emerging technologies around cloud infrastructure, mobile and social media, and Cisco is creating 115 jobs in a €26m investment to create cloud and virtualisation applications.
In Cork, EMC employs more than 2,500 people and, along with the Irish Government, is creating a new cloud innovation centre that can be used by the Irish public sector.
In addition, the Government recently revealed a €1.2m Cloud Computing Technology Research Centre will exist as a consortium of third-level institutions.
Among the young overseas companies that have come to Ireland to focus on the cloud are Marketo, Workday and Engine Yard in Dublin, iMosphere in Limerick, and Big Fish Games in Cork.
IDA Ireland's head of ICT Pat Howlin, who is responsible for overseeing much of this activity, believes the cloud is becoming for most people their main touchpoint with technology.
Cloud: 'It is very real and it is happening'
"It's currently the buzzword but it is very real and it is happening. The cloud allows most of us to use software, data and services over the internet from any location on any web-enabled device.
"But behind this, in terms of what this means for opportunities and what the companies are doing, the data centres are the critical piece of infrastructure that the cloud depends on.
"But there are other pieces to the puzzle and there are real opportunities in the areas of the software, infrastructure, platforms and systems. These are areas that make data centres work and get the information over the internet securely to the smartphone, laptop or tablet computer in your hand."
Howlin says Ireland needs to prepare itself for the vast array of opportunities that exist in making sense of all the data that smartphones, sensors, social media and the internet generates – this area is known as ‘big data’.
“Think of all the vast amounts of data we are generating through the proliferation of devices that are out there and that we are all connected to. Companies are trying to create products and services that mine and analyse all that data and turn it into something that businesses and entrepreneurs can monetise and make money out of.
“The whole area of analytics and business intelligence driven by the cloud is a key growth area for many companies, whether they are providing social media or cloud services.
“In addition to the big data opportunities, it's the variety of companies that are choosing to locate in Ireland that is interesting; cloud businesses like Marketo, the Gilt Group, Mycroft, Webroot and Workday are all companies that are in rapid growth phase and emerging as major brands. Another example is cloud security company Total Defense, a spinout from CA, which chose Ireland as its first European location.”
Ireland winning investment
Howlin says a key factor in winning investment is connectivity in and out of Ireland from a broadband perspective, and this is being aided by investments by Sea Fibre Networks and Hibernia Atlantic.
However, he urges more work be done on completing next-generation infrastructure inland to ensure all of Ireland is prime pumped from a broadband perspective to guarantee a greater regional spread of investment.
Another aspect Ireland needs to get right is skills. Last week, in IDA Ireland’s six-monthly report some 5,000 jobs have been created in the areas of technology, life sciences and financial services.
I ask Howlin about the key skills needed if opportunities are to be snapped up by graduates who want to be part of the cloud computing revolution.
“The big employment areas are primarily in the areas of computer science, engineering and programming. We need more graduates in these areas but also I foresee considerable employment opportunities in the area of big data and analytics, and for those areas we need more people highly qualified in mathematics.
“The colleges are also looking at developing courses that expand on analytics, such as designing the visualisation of data mining so that data is more understandable for business executives.
“This is all part of what they call the ‘gamification’ of cloud and big data – making data easier to understand and act on.”
I point out to Howlin that it is ironic that many companies that came to Ireland in the 1980s and 1990s to do things like assemble computers, package software and service customers are returning to peak employment levels based on the opportunities in cloud. Indeed Intel, whose Irish operations provided much of the global supply of Pentium processors in the 1990s, is creating 1,000 jobs in the building of an assembly plant for next-generation chips that could power servers in data centres or even smartphones in our pockets.
“Probably 60pc of investments that we have achieved or that are in the pipeline are with our existing base. Maintaining those relationships at an Irish country and corporate level is a large part of our activity. But you’ve got to keep feeding the pipeline and bringing in newer companies.
“Many of the companies in the cloud space are looking at internationalising at an earlier stage than many of their tech industry colleagues had in the past. Many don’t even wait to have a big customer in Europe to deploy a European function.”
Howlin is satisfied that Ireland has built up a reputation as the go-to place for cloud enterprises. “What is important is that Ireland is seen to capture its fair share. The fact that we maybe punch above our weight in a way that is greater than our proportion sends a message out there to look at Ireland as the prime location for this activity. We are excited and motivated to continue,” he adds.
Join Ireland’s digital leaders who will gather in Dublin on 23 November to discuss cloud computing and the big data revolution at the Cloud Capital Forum.