IRELAND HAS the potential to become a world leader in the emerging cloud computing industry, according to new research.

A report commissioned by Microsoft predicts that Ireland is poised to capture about 13 per cent of the world cloud computing market. By 2014, the cluster of firms involved in this industry in Ireland could generate €9.5 billion in sales, and employ about 8,600 people.

Cloud computing moves technology infrastructure into third-party data centres and is considerably cheaper than conventional approaches to computing.

“There isn’t a country around that has the same opportunity we have,” said Paul Rellis, managing director of Microsoft Ireland. A significant number of multinational software firms, including Microsoft, Amazon and EMC, already carry out cloud computing activities here, and many indigenous software firms have also entered the sector.

“We’re small enough to get things done quickly,” Mr Rellis said. Ireland’s urgent need to become competitive is another factor in our favour, he said. “I don’t think any country has the same level of need. There is no reason why we can’t win on this,” he added.

The report, conducted by Goodbody Economic Consultants, suggests that early adoption of cloud computing could save Irish organisations €0.5 billion in annual costs. It removes the need for businesses to raise money to invest in capital equipment for IT, and therefore could lead to the formation of 2,000 new small and medium-sized enterprises, the report predicts.

The efforts of Enterprise Ireland and the IDA to promote Ireland as a location for cloud computing were praised, but Goodbody also called for the existing supports to be organised into a cloud cluster programme.