Growing our cloud

Press Eye - Belfast - Northern Ireland  - 27 March 2008 -  General view of the Northern Ireland Science Park in the Titanic area of  Belfast. Picture by Kelvin Boyes / PressEye.com
Press Eye - Belfast - Northern Ireland  - 27 March 2008 -  General view of Citi Group's  office at the Northern Ireland Science Park in the Titanic area of  Belfast. Picture by Kelvin Boyes / PressEye.com A targeted effort to expand Northern Ireland’s cloud computing sector could have major economic benefits.

Developing Northern Ireland’s cloud computing sector could create 16,200 jobs and generate £1.2 billion of gross value added (GVA) by 2020, according to an Oxford Economics report for Whisple Cloud Services on its economic potential.

Cloud computing, it contends, can become an important sub-sector of the ICT industry and therefore the wider knowledge economy.

The local software and IT services sector has performed well over the last decade, growing from 5,000 to 8,000 jobs. Northern Ireland can now offer one of the world’s best digital platforms due to the Project Kelvin link, the Next Generation Broadband Programme and previous investments in core fibre capacity.

Software as a service (SaaS) is the “new cloud paradigm” for delivering packaged software whereas platform as a service (PaaS) and infrastructure as a service (IaaS) form the “natural progression” in IT outsourcing.

The report’s authors estimated the direct and indirect (or catalytic) economic impacts and then subtracted the displacement in the labour market as the roll-out of cloud will result in the loss of some traditional ICT jobs. However, it does add that its estimates “should be seen as indicative rather than absolute” as the impacts of new technologies are hard to predict.

Two forecasts were put forward, with both using 2011 as their starting point.

In the baseline scenario, cloud computing would still develop in Northern Ireland but with no active effort to grow the sector. This would deliver around 2,200 extra jobs and £300 million in GVA. Cloud will continue to grow due to its “centrality” in the software industry.

The high growth scenario assumes that the industry’s growth picks up and matches the global growth rate for cloud computing software. The fastest growth period (and therefore Northern Ireland’s greatest opportunity) would run from 2014 to 2017: 16.3 per cent per annum.

After then, growth is expected to drop to 6 per cent per annum. That scenario is based on Gartner’s estimates, which are the most conservative and cover a range of service models.

High growth could deliver 10,200 additional (directly employed) jobs by 2020 and £1.2 billion in GVA. The 16,200 figure includes 6,000 jobs created by company purchases and staff spending coming out of the software and IT services sector.

As a next step, the report calls for an industry-led cloud computing cluster strategy that can be “acted on, monitored and reported against” with the help of clear indicators, including the Northern Ireland Science Park’s Connect Knowledge Economy Index which has been operating since 2011.

Growth factors

• Clear business proposition

• Attract more inward investment

• Promote collaboration and research

• Increase procurement opportunities

• Pipeline of skills and venture capital

• Build more data facilities

Related Posts