As economic downturn puts a dark cloud across Europe, there is a clear sky above Ireland's IT sector and silver linings within its growing cloud business.
Ireland has been experiencing a major surge in the growth in cloud computing, capturing more than its fair share of global cloud investments. Cloud computing is a general term for anything that involves delivering hosted services over the internet.
According to the technological research company Gartner, the cloud computing market will be worth €207 billion by 2016 and the industry will generate nearly 14 million jobs in public and private IT cloud services within the next three to four years. More than half of these will be in small and medium sized firms.
Ireland has recently focused on the early stages of internationalising companies and is consistently enticing leading names to locate there. This includes Engine Yard from San Francisco, a leading Platform as a Service (PaaS) company, which has set up its European base in Dublin. Platform as a Service (PaaS) is a way to rent hardware, operating systems, storage and network capacity over the Internet. Engine Yard provides an open source-based solution that enables developers to focus on applications instead of having to manage their platform. Leveraging the cloud for competitive advantages is key. The company is backed by Benchmark Capital, New Enterprise Associates and Amazon.com. Amazon itself is a major investor in Ireland and recently chose Ireland as the base for a major portion of its European Data Centre infrastructure.
Marketo is another SaaS company in the B2B space providing marketing automation solutions that has chosen Dublin to internationalise from. Software as a Service refers to software that is centrally hosted on the cloud, typically accessed via a web browser. It is partnered with Salesforce.com, which is also located in Ireland. In 2011, Marketo was named in Silicon Valley Business Journal as the number one fastest growing private company; Forbes Magazine has named it one of 'America's Most Promising Companies'. Ireland is now home to the company's EMEA Headquarters.
Riot Games is an interesting cloud based business from California which was awarded 'Best Online Game' by Level Magazine in 2012 for its League of Legends (LoL) offering. It manages its European business from Dublin and is growing rapidly.
Ireland's success in this space is not just built around the newer emerging companies. At present, there is a major Data Centre construction programme underway by key players including Google, Digital Reality Trust, Telecity Group and Amazon. Much of this investment builds on earlier investments including that by Microsoft which has already spent close to $1 billion on a centre in the west of Dublin. This houses the bulk of its EMEA cloud computing activities. Microsoft also recently announced an expansion of this centre.
EMC has a major operation in Cork where it employs over 2,000 people. Together with the Irish Government, EMC is creating a cloud innovation centre for the Irish public sector. The Irish government has been very proactive in supporting the sector and it recently spearheaded a Cloud Computing Technology Research Centre which is based around a consortium of Ireland's third level institutions.
More and more established global players such as SAP, DELL, Cisco and IBM are expanding their existing Irish activities in to the cloud.
Silver linings in the future will be built around big data and the Irish strategy is to capitalise on this. Smartphones, sensors, social media and the internet itself are generating vast volumes of data. Opportunities are plentiful for the businesses which create products and services that mine and analyse the data. An area of focus for Ireland is analytics and business intelligence. Hence the growth of Irish-located operations like Marketo, Webroot and Workday.
Over the next couple of years it will be interesting to track how Ireland continues to build upon its current reputation as the 'go to place' for cloud enterprises. Over the years, Ireland has proven to be particularly astute at identifying early movers, leading to success in building new sectors like the 'born on the internet' space where it has all of the leading names including LinkedIn, Twitter, Google and Facebook. Big data is clearly a major focus now and is being supported by educational initiatives to provide the relevant talent, including engineers and mathematicians, focused on key strategic areas including internet and social media applications, data analytics, security, context aware computing, cognitive computing, personalisation and visualisation.
There is a long-term view that the silver linings are in the Irish clouds and ironically this is true - the temperate climate in Ireland is conducive to facilitating competitive and environmentally friendly Data Centre design.
Contribution from Barry O'Dowd, Emerging Business Division, IDA Ireland.