Cloud services adoption will boost GDP by $3.32 billion a year

Businesses could save 50 percent on IT costs, says KPMG report.

Australia’s GDP would increase by $3.32 billion a year if cloud services were adopted across 75 percent of relevant IT spending, a report by KPMG has found. The jump in GDP was calculated after a 10-year migration period during which large numbers of Australian businesses were expected to move to the cloud.

“It is clear from KPMG’s analysis that, should Australian organisations adopt cloud platforms as expected across their ICT requirements, then the benefits at both the enterprise and aggregate economy level could be substantial, lowering ICT operating and capital expenditures by up to 25 percent and 50 percent respectively,” the report said.

KPMG interviewed 30 companies in late 2011 about their experiences in moving to cloud services. Two key findings for small business were that:

  • Smaller organisations can experience increased growth potential as they can access better IT solutions that may have previously been out of financial reach, but which are enable by cloud services.
  • Replacement of large up-front capital outlays with small on-going user subscriptions for cloud-based products is allowing smaller, capital-constrained companies, especially technology-based ones, to enter markets more easily.

The study used evidence gathered from organisations through interviews, together with an extensive Australian and international literature review to develop a credible scenario for the uptake of and likely productivity increase from cloud computing services across the Australian economy.

KPMG’s in-house Computable General Equilibrium model of the Australian economy was then employed to estimate the potential productivity impacts of cloud computing adoption on long run GDP.

The study contained several case studies of organisations which had adopted cloud services including Surf LifeSaving Australia, an investment bank, printing company Ricoh and Arclight Investments, IT provider to the Ray White real estate group.

The study of cloud computing services centred on the potential benefits of public cloud, where multiple organisations access a shared resource pool for one or more of three distinct services. “Although public cloud appears to be less prevalent in Australia than private cloud, based on overseas experience and evidence from local service providers, public cloud has the greatest growth potential over the coming decade and is where economies of scale and the ensuing cost/productivity benefits to users are likely to be maximised,” the report said.

A recent survey by Frost and Sullivan suggested  that 43 percent of businesses in Australia were using some form of cloud computing services in 2011, up from 35 percent in 2010.

 

About Sholto Macpherson

Sholto Macpherson is a business technology journalist specialising in cloud software. He lives and works in Sydney, Australia.

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