Cloud can deliver up to 9,000 tech and 11,000 SME jobs

24 Jan 2011

Ireland has a narrow window of time – possibly only months – to capture for itself a disproportionate share of the booming cloud-computing industry, resulting in 8,600 technology jobs and a further 11,000 jobs in non-tech businesses.

An economic impact study prepared for Microsoft by Goodbody Economic Consultants has revealed that Ireland has many of the attributes to become a global cloud computing centre of excellence and could capture a disproportionately large share of the cloud computing industry estimated to be worth €40bn worldwide by 2014.

Ireland alone has a chance to build a €9.5bn a year in revenues industry by 2014, resulting in 8,600 new jobs.

Not only that but because cloud computing lowers costs to businesses, by migrating the to the cloud some 2,000 new non-IT small and medium-sized firms can be created that would in turn employ 11,000 people.

Early adoption of cloud computing by Irish users will take costs of €500m a year out of Irish organisations.

Transformative technology

“There is an opportunity that is real and clear. It is vital that we put in place a productive policy to take advantage of the transformative potential cloud computing has for all our organisations,” Microsoft Ireland managing director Paul Rellis told journalists this afternoon.

Rellis said cloud computing in time will have the same socio-economic impact as the arrival of water and electricity to premises.

“Ireland can take the front foot on this. There is a huge job creation opportunity and an opportunity to leverage multinationals to create a cluster of cloud-computing industries and this is going to help significantly with competitiveness. The potential is enormous.”

Rellis said he intends to work with IDA Ireland to influence policy changes that will help boost cloud take-up in Ireland but also attract cloud-computing organisations into the country. These policy areas involve entrepreneurship, broadband and electricity.

Specifically, Rellis and IDA Ireland CEO Barry O’Leary pointed to the creation of a major Cloud Cluster Programme to attract FDI and provide access to new markets.

They also called for the implementation of a high-profile Government cloud-computing project to showcase Ireland’s expertise globally.

They said there is a need to close the gaps in awareness of cloud computing in both the public and private sectors and to prioritise the development of skills to support the cloud.

An urgent task is to promote cloud computing to small businesses and start-ups.

“There really is a great opportunity if people appreciate the speed and urgency. We could take a disproportionate share of the cloud-computing market. We need urgent policy changes in the next 100 days. We intend to work with IDA Ireland to get these policies clear,” Rellis said.

Powerful cloud-computing clusters in Ireland

The author of the report, John Finnegan of Goodbody Economic Consultants, said: “This is a unique opportunity. The cloud is a transformative technology that could have an enormous impact and at an early stage.

“Powerful clusters could be developed here. We already have a lot of what is needed for this to happen. We have the international firms already engaging in cloud computing and if we provide the smaller and medium firms with the right suite of supports, cloud can be a huge driver for economic growth and bring us back into an era of growth.

“It will be an opportunity for Ireland to once again be seen as a technology leader and be the place that good technology comes from.”

Elaborating on how 2,000 new start-ups could deliver 11,000 new jobs, Finnegan said that traditionally IT equipment was one of the barriers to entry for starting a new business. “Turning it into a service that gives you computing on tap removes a barrier to starting and growing businesses. Turning computing into a service could help create 2,000 firms outside the IT sector.”

A key ingredient, Finnegan said, would be putting data centres in efficient locations. “Electricity costs in Ireland are coming down and we are at the forefront in terms of green, efficient data centres.”

Finnegan said the public sector would be an ideal beneficiary of cloud computing. “Revenue sources have been reduced for government. The cloud provides centralised control, brings services closer to citizens.”

He said the Local Government Computer Services Board already proved how it was possible to create a database of cross-county planning applications for a negligible cost.

O’Leary said the economic impact of cloud computing can be seen already in the changing nature of projects Ireland is attracting. “Twenty years ago, Ireland was attracting businesses making T-shirts. But now we have many of the established global giants in bio-pharmaceuticals, financial services and the internet space. In the past few years, we have attracted Blizzard, Facebook, EA and Zynga because we got in early enough to capitalise on the opportunity.

“From an FDI perspective, we have been good at attracting the large and mid-tier enterprises but for smaller companies around the world the cloud is going to enable them to internationalise service offerings and we have put people into New York and Mountain View to capitalise on opportunities.

“Cloud computing is certainly an area of concentration for IDA Ireland and a good growth opportunity for Ireland.

Finnegan said that in 2010, 30pc of Irish ICT firms were already selling cloud services, which is already above average internationally. By 2013, this is predicted to grow to 47pc of Irish ICT firms.

John Kennedy is a journalist who served as editor of Silicon Republic for 17 years