Over the last five years, the adoption of cloud services by Australian businesses has resulted in a cumulative productivity benefit to the economy of $9.4 billion, a Deloitte Access Economics report has estimated.
To reach the figure, Deloitte leveraged the results of a survey of more than 500 Australian businesses currently using at least one cloud services platform, recent research on productivity increases associated with greater adoption of digital technology, and other research linking productivity improvements to wider economic impact.
“Quantifying the economy-wide benefits of cloud computing is more than an arithmetic exercise,” Deloitte note in the report, commissioned by major cloud provider Amazon Web Services.
“As the proportion of businesses using cloud services increases, and as the sophistication of cloud use matures, it is likely that Australia will experience an even greater economic and productivity dividend,” the report states.
The contribution to GDP, the report points out, is equivalent in magnitude to the Australian government’s total IT spend in the 2016/17 financial year.
The survey within the report found the clear majority (78 per cent) of business users of cloud services reported productivity improvements since that started using cloud services. Businesses that reported benefits estimated an average productivity increase of 29.6 per cent.
The remaining quarter did not experience productivity benefits or were not sure if they had.
The productivity gains were not typically linked to a reduction in jobs. Around half (48 per cent) of businesses using cloud services reported an increase in IT staff and 41 per cent reported an increase in non-IT staff. A similar proportion reported no change to employment figures.
Australia is nevertheless “still at the beginning of its cloud journey” the report notes.
Recent Australian Bureau of Statistics figures show 42 per cent of all businesses in Australia have taken up paid cloud services in 2017/18 (more than double the number four years prior). The information, media and telecommunications sector is currently the greatest user of cloud services, with 64 per cent of businesses in the sector reporting adoption of cloud, followed by professional services, finance, and mining.
Of those using cloud services, the Deloitte survey found services were most commonly used were customer relationship management, invoicing, marketing, file storage, financial operations and accounting and business planning.
The most common technology drivers of cloud adoption were the ability to trade capital expenditure for operating expenses, the ability to access resources as required for development and experimentation, being able to instantly scale resources up and down, and increased data storage.
The most common business drivers were ‘improving customer service’, ‘keeping up with competitors’ and ‘seeking to adopt innovative technology’.
The two biggest barriers to adoption – as cited by 37 per cent of respondents – were challenges in educating staff on cloud and migrating from legacy technology.
“Our analysis shows there are clear benefits for Australian businesses that use cloud services,” said Deloitte Access Economics partner, and the report’s principal author, John O’Mahony.
“Australia is still at the beginning of its cloud journey, both in terms of the share of businesses using cloud services, and the sophistication of their use. As these evolve, cloud-based innovation will have a growing impact for businesses across the Australian economy