Europe to reap cloud computing dividend-study

LONDON Tue Dec 7, 2010 3:28pm GMT

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LONDON Dec 7 (Reuters) - Cloud computing will boost job creation in the European union, and add 763 billion euros ($1,019 billion) in productivity to the top economies over the next five years, according to a study from the Centre of Economics and Business Research (CEBR).

"We believe cloud computing will impact to tune of 177 billion euros (a year) by 2015," said Andrew Moloney, a director at U.S.-based IT firm EMC Corp. (EMC.N), which commissioned the study.

Cloud computing -- the storage of data and applications on remote servers that are accessed over the Internet -- was enabling companies to become more nimble, he said, for example in scaling up a sales operation.

Other benefits included less capital expenditure on IT equipment and reduced IT headcount, he said.

"We are really at an inflection point, where 70 percent of the time in IT departments is spent on keeping the lights on as opposed to innovating and driving new business models," he said.

"Cloud computing is unlocking that capability, whether it's large enterprises using private cloud infrastructures or SMEs using more public cloud infrastructures."

Of the five major European economies, the UK was the most advanced in the amount of computing moved to the cloud, but it would trail Germany, France and Italy in terms of the overall financial benefit from the shift to the cloud, said Oliver Hogan, managing economist at CEBR.

"That largely centres around the productivity of UK firms," Hogan said. "It's very low by comparison to Germany and pretty low by comparison to France as well."

The study found that while cloud computing would result in cost savings, it would lead to the creation of 446,000 net new jobs a year by 2015 from the creation of new small businesses.

Researchers based the analysis on the assumption that 100 percent of business workloads would move to the cloud by 2014 from about 20 percent today. (Reporting by Paul Sandle; Editing by David Cowell)