The cloud jobs opportunity

23 Mar 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 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 says.

Rellis says that over time, cloud computing will have the same socioeconomic 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 says 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 foreign direct investment (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 says.

Powerful cloud-computing clusters in Ireland

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

“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.”

IDA Ireland chief executive Barry O’Leary says 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 biopharmaceuticals, 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; 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 says that in 2010, 30pc of Irish ICT firms were selling cloud services, which is already above average internationally. By 2013, this is predicted to grow to 47pc of Irish ICT firms.

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 says cloud computing already represents 30pc of the company’s global revenues.

Recent research by EMC found that as many as 2.4m new jobs and revenues of €177.3bn per year could be added across Europe’s top five economies as a result of the uptake of cloud computing.

In what is the first macroeconomic research of its kind to calculate the value of cloud adoption, the Cebr report calculates that €177.3bn per year will be generated by 2015 if companies in Spain, France, Germany, Italy and the UK adopt the technology as expected.

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

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. In particular, there’s a lack of clarity 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.”

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