Cloud Computing Cloud Computing

The defining feature of cloud computing (CC) is that cloud users, including public administrations, SMEs and non-profit organisations, do not need to invest substantial amounts of money in IT infrastructure, but pay for actual usage, according to current demand. This translates into a major reduction of costs for public administration, easier access to state-of-the-art technologies and flexibility for increasing IT capacity on a need basis. This is a major advantage given the steep rise in demand for computing power. It can be difficult to absorb substantial expenditures on in-house ICT infrastructure to offset growth.

Moreover, the take-up of cloud computing services contributes to a more cost-efficient public administration through e-government. Cost savings are mainly based on standardisation and system integration, as well as economies of scale and flexibility to use the resources that are needed at a particular point in time. However, the benefits are not limited only to the public administration. A broad adoption of cloud services increases the participation of SMEs in public procurement, especially in markets which have been previously highly concentrated. Thus, companies gain easier access to new markets and sectors. This drives competition, creates innovation and reduces the costs of IT procurement.

In terms of macroeconomic benefits, CC offers a strong productivity boost for companies and the European economy. It is a core driver for innovation and can enhance industrial strength (high-end computing, gaming, engineering etc.). Work can be done more quickly, more efficiently and in a cost-effective manner. CC advances the revolution that ICT has started, users can access their content, and use their software when and where they need it, e.g. on desktop computers, laptops, tablets and smartphones, as long as there is a sufficiently robust broadband Internet available. Moreover, it can help organisations to reach out to their communities.

According to an IDC study contracted by the Commission cloud computing has the potential to add €450bn to EU GDP between 2015 and 2020, as well as to create 1.6 million additional jobs and 300.000 companies from 2008 to 2020.