Cloud Computing To Boost European Recovery

EMC has a sunny forecast for European businesses: the cloud will generate 2.4m jobs over the next four years.

If companies across Europe’s five largest economies, the United Kingdom, Germany, France, Italy and Spain, continue to adopt cloud technology as expected, they will generate more than $243 billion (£150bn) in revenue per year, EMC said in its Cloud Dividend Report Part 2 on 24 February.

Expanded opportunities

A little less than half of that amount, or $101bn, will be created through expanded business development opportunities and new business creation, according to the Cloud Dividend report, compiled by the UK-think tank Centre for Economics and Business Research. The report also analysed the impact of the cloud on vertical industries up to 2015.

“One of the key drivers for economic recovery will be job creation,” said Oliver Hogan, CEBR’s managing economist. Cloud roll outs are expected to produce 446,000 jobs each year in Europe, Middle East, and Africa until 2015.

With cloud computing, businesses won’t have to buy, develop or maintain costly IT systems and applications. By switching to the pay-as-you-go model, businesses can reap major cost savings. The financial benefit for cloud computing will exceed $1tn by 2015 as the businesses plow the cost savings back into other business areas, the report found. The actual cost savings from 2010 to 2015 will be about $193bn, which will be in the form of reduced capital expenditures, labour costs, and power and cooling costs, according to the research.

The distribution, retail and hotel sector will see the most benefit from cloud computing, with more than $320.5bn in earnings and 354,790 jobs generated, according to the study. Banking and financial services is expected to rake in$253bn, followed by government, education and health care with $155bn, EMC said.

Manufacturing will see the smallest revenue stream at a still-respectable $134bn, but have strong growth, with 514,000 new jobs, according to EMC. The public sector is expected to gain the most out of all vertical markets, with over 800,000 new jobs expected as organisations shift towards cloud services, the report found.

Private and hybrid clouds

Out of the European countries, Germany would benefit the most, followed by France, Italy, the UK and Spain, EMC said in the report. The annual economic benefit of cloud computing by 2015 would be $68.2bn in Germany, $51.4bn in France, $48.3bn in Italy, $41.3bn in the UK and $34.7bn in Spain, EMC predicted.

The study focused on public, private and hybrid clouds. The total economic benefit of the private cloud alone will be over $82bn in 2015, according to the research findings. Organisations get the “best of both worlds”, with dynamic, on-demand, self-service and scalable benefits of the cloud while retaining control within the IT department for security and compliance reasons, EMC said.

Private clouds alone will also increase business development and business creation across the five countries surveyed by $32.7bn, EMC said.

Successfully virtualising mission-critical and revenue-generating applications will be critical to organisations looking for the cloud’s competitive advantage, according to Sandra Hamilton, EMC Vice President EMEA. “That will be key to realising the full cloud dividend,” she said.

Although slower to adopt the technology than some other sectors, the financial services industry is beginning to embrace the phenomenon, according to the report. About 60 percent to 80 percent of all businesses in the banking, financial and business services sector in Europe, Middle East and Africa will have adopted some form of cloud computing by 2015, predicted the report.