Europe to gain from cloud computing

7 Jan 2011

Jobs and revenues could be added across Europe’s top 5 economies as a result of cloud computing uptake, says an EMC-commissioned report.

In what is the first macroeconomic research of its kind to calculate the value of cloud adoption, a recent Centre for Economics and Business Research (Cebr) report, commissioned by EMC, finds that €177.3bn per year will be generated by 2015 if companies in France, Germany, Italy, Spain and the UK adopt the technology as expected.

A recent IDC report on the Irish market expects a 40pc year-on-year growth in cloud computing.

The Cebr finds that the annual economic benefit of cloud computing for each country by 2015 will be:

■ France – €37.4bn
■ Germany – €49.6bn
■ Italy – €35.1bn
■ Spain – €25.2bn
■ UK – €30bn

A figure of €177.3bn could cover loans made to some of the indebted countries in the region, such as Ireland (€85bn) and Greece (€110bn), and would pay for the four-year €95.7bn cuts to public expenditure recently announced by the UK government.

Cloud computing is a new approach to IT, in which technology is made available to businesses in a scalable manner and as a service, when they need it. This speeds up time to market, removes traditional barriers to entry and allows companies to exploit new market opportunities. This ‘business creation’ will have a profound effect on the market structure of many sectors as competition increases.

Cloud computing and economic growth

The Cebr believes that cloud computing will be a significant driver of economic growth, competitiveness and business creation across the
Eurozone. It highlights the important role that this technology will have in the economic recovery of the territory, particularly in facing the
increasing threat posed by emerging economies that traditionally benefit from higher levels of competitiveness.

By 2015, Cebr predicts that €133bn will be accounted for by the non-public cloud models. The private cloud model offers the best of both worlds: organisations get the dynamic, on-demand, self-service and scalable benefits of the cloud, but control remains with the IT department so security and governance is not compromised.

EMC, a major player in the cloud infrastructure market, employs 1,600 people in Ireland and recently invested €20m in a local R&D centre.

EMC Ireland country manager Jason Ward tells Siliconrepublic that cloud computing already represents 30pc of the company’s global revenues.

Ward says there’s a lot of work to be done in Ireland to convey to businesses the advantages of cloud computing.

“I think Ireland in most respects tends to be a laggard when it comes to technology adoption. There’s a lack of clarity in particular around private versus public cloud.

“Businesses need to see cloud computing as an approach to IT that reduces complexity. It creates an on-demand self-managed IT infrastructure.

“The crucial difference between public and private cloud is that businesses can retain ownership of the private cloud and this assures them that the enterprise private cloud is trusted, reliable and secure.”

Ward says that EMC has an alliance with VMware and Cisco to deploy a secure private cloud in a box solution.

“This reduces a lot of the associated cost and therefore businesses can reduce capital expenditure and operational expenditure, improve profitability and in turn grow their workforce, creating jobs and growing capability.”