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Aus lags in cloud wave

ICT spend slows, clouds lining looks silver

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Cloud computing could be the life line for dwindling ICT expenditure at the top end of town, according to a new report from KPMG.

The study, titled Modelling the Economic Impact of Cloud Computing, found that ICT capital and operating expenditure is expected to significantly reduce over the next ten years, based on studies across all sectors of the economy excluding agriculture.

The report states that firms will be seeking solutions that produce greater amounts of output with the same level of input to free up resources for use in other forms of production.

The adoption of cloud platforms could result in opex and capex savings of 25 per cent and 50 per cent respectively, if it hit adoption levels of 75 per cent, as witnessed in the more mature US market, the report forecasts.

The report estimates that after 10 years, this would result in an increase in long-run GDP of A$3.32 billion per annum. At 50 per cent adoption levels, the GDP gain is A$2.16 billion per annum.

"There’s a critical need to continue to find ways to improve productivity in Australia, widespread adoption of Cloud by businesses and government is the next key area of potential productivity improvement,"€ said Nicki Hutley, chief economist at KPMG.

The study which was which was commissioned by the Australian Information Industry Association (AIIA) also found that adoption of cloud computing was lagging locally compared to uptake in the US and Europe.

AIIA chief executive Suzanne Campbell said: “Cloud computing has been shown to not only boost productivity, but it also adds greatly to the flexibility and agility of business. There are huge opportunities for businesses in Australia to adopt Cloud computing and set a firm foundation for their future growth and development.”

A key issue blocking take up is that cloud-based solutions did not always deliver identifiable, immediate or on-going cost savings.

The report also found that barriers to cloud adoption include: the compatibility of an organisation's internal processes with cloud offerings, connection speeds, location of data and related security issues, business continuity/disaster recovery and integration, and limited knowledge of product offerings including businesses’ lack of familiarity with opportunities. ®

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