Spending on public cloud is expected to have an economic impact of $450 billion across six Asia-Pacific markets including Singapore, India, and Australia, from 2019 to 2023, if it remains on a compound annual growth trajectory of 25%. It also can enhance productivity with wider availability of online government services, driving "significant" improvement in citizen experience in these Asian economies.
Growing spend on public cloud could would not only have an economic impact on its industry users, it also fuel further business growth across the supply chain of these users as well as consumer spending, according to a study released by Google. Conducted by Boston Consulting Group, the survey polled more than 1,000 IT decision makers in the six Asia-Pacific markets, including 120 from Singapore as well as respondents in Japan, South Korea, and Indonesia.
The study estimated that public cloud adoption would directly generate 425,000 jobs across these economies, with the majority driven by industry users rather than cloud vendors.
These six markets last year forked out $18 billion on public cloud services and, while smaller than spending in the US and Western Europe, clocked the highest CAGR from 2016 to 2018 at 25%. India and Indonesia, in particular, were the fastest growing amongst the pack of six, hitting growth rates of more than 30%.
In addition, public cloud spending across these markets expanded to account for 5% of their overall IT expenditure in 2018 compared to 3% in 2016. This figure could climb to 10% by 2023, the report estimated. In comparison, public cloud spending in the US accounted for 14% of total IT spending last year, while this number was 8% in Western Europe.
In Singapore, the study estimated that public cloud adoption could add $30 billion to the country's GDP over the five-year period, or about 1.7% of the national GDP per year. It also could generate 22,000 jobs, including 8,000 roles in digital and technology such as data science, engineering, and user experience.
Some 70% of respondents in the city-state reported a growth in revenue from their public cloud deployment, while 65% pointed to an increase in productivity.
Across the six markets, public cloud deployment could result in a revenue uplift of $84 billion over the next five years, accounting for 3% of the company's current overall revenue.
The use of cloud-powered analytics and other technologies such as artificial intelligence and machine learning also could improve decision making and cost efficiency. In fact, the study estimated that public cloud could help enterprises save $21 billion over the next five years from enhancements in productivity, or about 2% of their current non-IT costs.
The report cautioned, though, that several challenges--if left unaddressed--could adversely impact the potential economic growth that public cloud technology could trigger across the six Asian markets.
Large traditional businesses, for instance, could find it tedious to move their workloads to the public cloud. Infrastructure in some markets also must be improved to ensure public cloud services could be delivered reliably. In addition, enterprises would require new digital skills to deploy and manage cloud technology as well as establish a policy regime that ensured data privacy was adequately protected. A policy framework based on international best practices would enable cloud service providers to more quickly launch new products that supported market requirements.
According to the report, if these challenges were not properly addressed, the overall economic impact of public cloud adoption could be slashed by $75 billion, bringing down the total impact to $375 billion between 2019 and 2023. It also could cost about 190,000 jobs, reducing the number of new jobs generated to 235,000.
In comparison, if these challenges were resolved, it could drive up the total economic impact to $580 billion and directly generate 770,000 jobs.
To drive potential growth from public cloud deployment, the report urged the need for continued investment in education, training, and certification. It also called for higher cloud literacy amongst public- and private-sector employees.
Government agency GovTech, for instance, is utilising multiple cloud platforms including Google Cloud to support the development of its National Digital Identity (NDI) initiative. Slated to be operational next year, the NDI is a crypto-based mobile digital identity to enable citizens to transact online with the public as well as private sectors securely and seamlessly.
Speaking at the summit, GovTech's senior director for NDI Kwok Quek Sin said the crypto ID would ensure higher security and could be used online or in the physical realm. He added that the aim was to enable a trusted ecosystem in which data and services could flow, just as Singapore had become a global hub that supported the movement of goods and people.
The Singapore government last October laid out plans to move some of its systems to the cloud and build a suite of standardised software components to help quicken application development. This "reengineering" was necessary to drive the country's smart nation goal, said its prime minister Lee Hsien Loong.
Kwok said the government focused on four key areas to drive its projects, including product management, which required a "co-development" approach with users and the industry to ensure the services it developed were relevant, and a cloud-first model. It also invested efforts in building up its engineering capabilities, which would enable the government to take ownership of its products and services and support its architecture decisions.
In addition, building its own technology stack would help drive more consistency, reusability, and interoperability of its apps, he said, noting the government was moving the majority of its services to the cloud to leverage the platform's scalability and industry innovation to build modern apps.
He added that running a multi-cloud environment also assured the Singapore government could have more choices, enabling it to make a range of architectural decisions, as well as prevent issues of vendor lock-in.
Cloud vendor has identified health and life sciences as well as retail amongst key growth sectors and is looking to triple its headcount in the Asia-Pacific region over the next 18 months.
Markets such as Indonesia still are grappling to roll out fibre connectivity to all users, without which cloud adoption will be premature, while some large businesses also have to ensure it makes economic sense to do so.
With cloud market players Alibaba and Google ramping up their regional data centre footprint, Amazon Web Services is relying on the "breadth and depth" of its service offerings and platform maturity to maintain its competitive edge.
Edge computing is being sought out for faster response and cost savings, but there are concerns about security and latency when large volumes of data are processed on such platforms.
While coy over how the Huawei-US debacle may impact other Chinese technology vendors, Alibaba Cloud executives play up their "in Asia, for Asia" focus and investment in the region as a key competitive advantage over its US competitors, including AWS, Microsoft, and Google.