Is cloud computing really worth €30 billion a year to UK?

New research commissioned by EMC makes the staggering claim that cloud computing will boost the UK economy by €30 billion a year (£25 billion).

The research, carried out by the Centre for Economics and Business Research (CEBR) and commissioned by storage giants EMC, claims cloud technology will increase not only the UK economy, but those of France, Germany, Italy and Spain, to a total of €177.3 billion per year by 2015.

Although the report recognised the importance of public, private and hybrid clouds, it claimed the latter two would be the major contributors, accounting for €133 billion, or 75%, of the generated value.

So how did the CEBR arrive at such fantastical figures, given that a recent Google-commissioned survey claimed the entire UK internet economy was only worth £100 billion a year?

The numbers are based on an awful lot of assumptions. Oliver Hogan, managing economist at the CEBR, said it arrived at the figure of €30 billion by breaking the economy down into nine industry sectors, then looking at the different characteristics, such as levels of IT spend and what cloud models they were using or planning to use.

The CEBR then aggregated the cost savings they “could make” and the ability to develop their business further to generate extra revenue, as well as the potential earnings the cloud would give to new businesses entering each sector. They added all of these theoretical figures together to reach the €30 billion.

What’s more, the CEBR said the UK would only reap such huge benefits if cloud computing adoption continued at the same rate as shown throughout 2010.

The fact the research was sponsored by EMC – which has been pushing “the journey to the private cloud” as its mantra since its annual conference back in May – adds another layer of suspicion to the figures.

The CEBR nonetheless maintains that cloud computing could help lift Europe out of its economic gloom. “CEBR’s study shows that, not only is cloud computing an issue from the micro perspective of boosting the efficiency of an individual company’s IT investment and, hence, of its corporate productivity, but also that, especially in the present uncertain economic climate, it is also likely to be a critical macro-economic factor that will be crucial for boosting Europe’s economic growth,” said Hogan.