KPMG: Cloud computing is a $3.25 billion opportunity

KPMG: Cloud computing is a $3.25 billion opportunity

If businesses directed 75 per cent of their ICT spend to Cloud services, it could contribute billions to Australia's GDP after 10 years.

Cloud computing has the potential to bolster the Australian economy by $3.32 billion per year, according to KPMG.

In its report, Modelling the Economic Impact of Cloud Computing the economic advisory firm estimates if Cloud services are adopted across 75 per cent of ICT spend by businesses it would increase long-run GDP after 10 years by 0.23 per cent, which translates to $3.32 billion per annum. A 75 per cent adoption rate, according to KPMG, is achievable.

The figure changes to $2.16 billion at a lower Cloud adoption rate of 50 per cent.

GDP is a measure economic growth.

The report was commissioned by the Australia Information Industry Association (AIIA) and launched by Communications Minister, Senator Stephen Conroy, in Sydney.

“It makes it clear that Cloud computing if not simply something for the ICT sector - It has relevance to the entire economy,” Senator Conroy said.

KPMG conducted in-depth interviews with 29 organisations in various sectors that accounted for 80 per cent of Australia’s GDP. Those that have already made their move to the Cloud extolled its tangible and intangible benefits.

Overall, Cloud computing will have a significant impact on Australia’s productivity if it is rapidly adopted across different sectors for their ICT needs.

KPMG looked at both public and private Cloud models in its research by it focused on public Cloud since it had the most potential for changing the operation of ICT within organisations.

The firm identifies Cloud computing by a set of criteria: On demand self service, scalabilty, broad network access, resource pooling, and utility based pricing.

“It seems in Australia at the moment the Cloud sector is very much in its infancy and because of concerns about data sovereignty, data security, and particular access issues, there are a number of organisations and enterprises that are using private clouds,” KPMG chief economist, Nicki Hutley, said. “Private Cloud is veyr much the first step in the Cloud journey.

“Cloud is not something that happens overnight and it can take years for organisations to get to full adoption levels.”

According to Hutley, Australia is experiencing the first productivity slump in a decade. While Governments have introduced “low-hanging fruit” reforms such as for industrial relations and tax, Cloud computing should be looked at to augment productivity.

The report found financial services, property, education, media, and telecommunications sectors benefited the most from Cloud computing. But Hutley said SMBs and start-ups can take advantage of Cloud computing as well thanks to the scalability of such services. There is no longer a need to have a huge upfront set-up cost for IT infrastructure.

There are still hurdles for widespread cloud adoption. As mentioned before, data sovereignty and security remains a concern for businesses. One other major barrier is speed, latency, and reliance of telecommunication services to facilitate Cloud computing.

This is of a particular concern for businesses, particularly SMBs, that are situated in region areas that do not have metro-comparable broadband services, according to Senator Conroy.

“Fast and reliable connections need to go beyond the CBD, business parks, and other capital cities,” he said. “ For the full potential of the Cloud to be realised by the two million or so businesses in Australia, we need broadband infrastructure that is ubiquitous and affordable. That is what the National Broadband Network (NBN) does - The NBN positions Australia perfectly.”

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