Cloud worth $3bn per year to Aus: KPMG

While the big end of town may be able to shave dollars off their IT budgets by using cloud computing, a government-backed report into cloud in Australia has found that cloud computing will drive an increase in start-ups and small businesses in Australia, while adding $3 billion to the nation's gross domestic product per annum.

While the big end of town may be able to shave dollars off their IT budgets by using cloud computing, a government-backed report into cloud in Australia has found that cloud computing will drive an increase in start-ups and small businesses in Australia, while adding $3 billion to the nation's gross domestic product (GDP) per annum.

KPMG came to the multibillion-dollar conclusion by conducting detailed interviews with 29 Australian businesses that made up 80 per cent of the GDP in Australia. KPMG found that if Australia's financial services, property, business services, education, media and telecommunications sectors invest in public cloud infrastructure, they could achieve savings of between 25 and 50 per cent per annum on their ICT budgets. By contributing the savings back into increased productivity initiatives, the nation's GDP would grow by a maximum of $3.32 billion per annum over the next decade.

KPMG chief economist Nicki Hutley said that cloud computing will be a boon to smaller businesses, since start-ups now have a much lower barrier to entry in the Australian market.

"Start-ups can now exist cheaper," Hutley said. "They can apply for services as required. That is a huge change in the game plan for small business in Australia. There will be adoption [of cloud computing] across large companies for lower costs, but the real game changer lies in smaller end of town," she added.

The results of migrating to public cloud are already occurring in some organisations. Surf Life Saving Australia (SLSA), for example, recently migrated its systems for member management, education management, control, indent management and voice recognition, as well as its public beach safety sites and member self-service portals to the public cloud. SLSA told attendees that it has saved $400,000 per annum as a result of the migration.

Senator Stephen Conroy also attended the launch of the report, and explained that the barriers to public cloud adoption in Australia continue to be data sovereignty and connectivity issues stemming from sub-par broadband.

"Australia is still in the early stages of [cloud] adoption, but cloud computing is starting to provide significant benefits to business across multiple sectors. There are barriers, however, including the speed and latency issues of our broadband networks," Conroy said.

The senator praised the work of on-shore public cloud providers, including Telstra, Fujitsu, NextDC and Macquarie Telecom, for establishing local facilities for use by Australian companies concerned about their data moving offshore.

Conroy added that Attorney-General Nicola Roxon is likely engaged in discussions with the Obama administration about the effect of the Patriot Act on data stored offshore.

Conroy said that Australia is a great place for international companies to stand up datacentre gear, and said that he hopes to be meeting with Google in an upcoming trip to San Francisco. The senator said that he hopes to discuss Google's plans for an on-shore Australian datacentre in the near future.

Other multinational IT companies have also reportedly been eyeing Australia for datacentre investment, including Salesforce and Amazon Web Services (AWS).

Price inquiry to name and shame

At a doorstop interview following the event, Conroy said that he hopes to have the terms of reference for the review into IT price gouging prepared shortly, adding that the upcoming federal budget is slowing things down.

"I'll be talking to the chair [of the inquiry] and [federal MP Ed Husic] over the next few days. We're scheduled to catch up next week. Budget week is a hairy week, and there's a lot of theatre and drama," Conroy said, before adding that the need for the inquiry is paramount.

"The evidence is clear. It became exposed when the [Australian] dollar went up. When we got parity, it left us scratching our heads," Conroy said. He added that there may be a legitimate reason for price disparity between like-for-like products on sale in Australia and in the US — but, if there wasn't, the inquiry would call vendors out.

Analysts told ZDNet Australia this week that vendors guilty of profiteering in the Australian market will continue to ride the wave of high prices for as long as they can.

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