Cloud Computing Adoption Can Generate EUR 763 Billion in Europe by 2015, Cloud Dividend Report

Cloud Computing Adoption Can Generate EUR 763 Billion in Europe by 2015, Cloud Dividend Report

Cloud-based solutions and adoption of cloud computing could generate up to EUR 763 billion in economic benefit in the five largest European economies by 2015, part two of EMC Corporation’s 2011 Cloud Dividend report conducted by the Centre for Economics and Business Research (CEBR) revealed. The report studied possible economic benefits of cloud computing adoption and deployment of cloud-based solutions in France, Germany, Italy, Spain and the United Kingdom. Distribution, retail and hotels sectors alone could generate EUR 233 billion in value in the next four years, according to the report.

The study examines the benefits generated by the three most widespread cloud computing models; namely, public cloud, which is controlled by a cloud provider; private cloud, which is controlled internally by an organization’s own IT team as well as hybrid cloud, which is a combination of the two.

Distribution, retail and hotels are expected to generate EUR 233 billion by 2015, mostly from accelerated business creation, business development and cost savings. The sum represents some 31 percent of the total economic benefit forecast by CEBR while 77 percent of the overall value is expected to be generated by adoption of private and hybrid cloud solutions.

France, Italy, Spain and the UK saw their distribution, retail and hotels sectors benefit most from the Cloud, while banking, financial & business services sectors are leading the pack in Germany, reporting IT capital expenditure (CapEx) savings of EUR 18.1 billion.

Over 800,000 new jobs could be created in the government sector within the region, the report said. Adoption of cloud computing solutions could create up to 2.4 million new jobs by 2015, according to the Cloud Dividend 2011 report.

Cumulative Economic Benefits 2010 – 2015

Industry Sectors

EMEA (EUR mil)

Jobs (‘000s)

Distribution, retail and hotels

233418

355

Banking, financial and business services

183566

207

Government, education and health

112539

801

Manufacturing

98504

514

Other sectors¹

135271

519

Total

763297

2396

Source: Cloud Dividend Report 2011

Data show obvious benefits offered by adoption of cloud computing solutions across various economic sectors in the five countries. “Distribution, retail and hotels is projected to generate the largest returns from cloud deployments despite decreased spending power and commodity price pressures. Banking, financial & business services is also one of the stronger sectors, in terms of the resulting benefits, but lower relative IT CapEx-to-labour ratios in this sector mean its share of the total benefits in EMEA isn’t proportional to the sector’s powerful contribution to overall GDP. One of the key drivers for economic recovery will be job creation and, interestingly, the public sector should gain most here with up to 800,000 positions expected to result from the adoption of cloud services,” Oliver Hogan, CEBR’s managing economist, commented in a press release.

Apart from distribution, retail and hotels sector, the banking, financial & business services sector could potentially aggregate EUR 183 billion in economic benefits by 2015. According to the report, between 60 and 80 percent of all enterprises in this segment utilize cloud solutions, with 76 percent of them employing private and hybrid cloud models.

Government, education and health sector can benefit most from cloud computing in terms of job creation, with some 800,000 new jobs predicted. The net total cost savings could reach up to EUR 14.5 billion by 2015 with levels of private and hybrid cloud adoption being predicted.

Manufacturing and SMEs can achieve substantial productivity gains through faster time-to-market and IT scalability resulting in EUR 11.4 billion of potential benefit in the UK, the report said. Other sectors to benefit from adoption of cloud computing solutions include agriculture, forestry & fishing, construction, transport, storage & communications and energy & utilities. The energy & utilities sector is forecast to witness EUR 14.1 billion in benefits from the adoption of cloud computing, with private cloud models dominating the sector due to strict government regulations related to data and information security in this industry.

Country positions overall 2010 – 2015

Country

Total economic benefit (EUR mill)

Jobs (‘000s)

Germany

221239

789

France

162749

469

Italy

150770

456

UK

117989

289

Spain

110550

392

Total

763297

2396

Source: Cloud Dividend Report 2011

Commenting on the report’s findings EMC Consulting’s Vice President EMEA, Sandra Hamilton, said on the company’s website, “The adoption of cloud technologies and services across EMEA brings with it the mission-critical agility that businesses need to survive and thrive in the current economic climate. A hybrid cloud model – a dynamic combination of internal and external resources where a private cloud serves as the gateway and control mechanism for public cloud services – provides organizations with the ultimate flexibility. However, a critical element in businesses achieving the competitive advantage presented by cloud computing lies in the successful visualization of mission-critical and revenue-generating applications. That will be key to realizing the full cloud dividend – and to deriving the powerful growth and productivity gains which, as the new report shows, can lead to meaningful job creation across the EMEA region.”

By Kiril Kirilov

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