The state of the cloud in Ireland [2023]
Ireland is one of Europe's most important digital hubs. But what is the state of our cloud industry? Join us as we dig through the key stats.
Back in 2011, Ireland was dubbed "the home of the cloud".
Even then, it was a global centre of computing skills and resources, home to more than 20 legacy data centres and the site of new developments by Microsoft and European firm Interxion.
But how about today? How has the state of the cloud in Ireland changed?
Well, the intervening decade has seen a huge spike in demand for cloud technologies. This has been in the offing for many years – but it was given a massive shot in the arm by the COVID-19 pandemic.
The enforced lockdowns brought about by COVID led to spiralling demand for cloud technologies. Newly scattered workforces needed remote access to corporate software and data – and cloud solutions filled that gap.
Today, data and analytics are at the top of the to-do list for many Irish businesses – and Dublin is a colocation hub for many cloud platforms that provide resources for European businesses.
The
public cloud market itself has been increasing exponentially. In Ireland, it's expected to grow by a staggering 97.78% between 2023 and 2027 – a transformation worth 2.4 billion USD.
The 2022 EY
Tech Horizon report digs into the digital transformation goals of Irish businesses – and the results speak for themselves. Ireland remains on the vanguard of European cloud investment.
Facts and figures
EY found that 50% of Irish respondents consider cloud technology to be the number one driver of added value for their businesses – followed closely by data and analytics at 46%.
This added value comes in a number of forms. First, it's a way of changing customer behaviour by creating new ways of branding, marketing and interacting with customers.
Second, it can help businesses to quickly identify supply chain issues. This has been an issue for businesses in Ireland and elsewhere at least since the pandemic. Being able to forecast disruptions to the supply chain means that businesses can be forewarned and forearmed.
Third, cloud technologies provide rich, actionable seams of data – data that can drive better decision-making. To take one example, this data could help inform a business's market entry strategies.
Finally, the continued adoption of cloud tech is seen as a way to enhance product development.
EY's Ireland Partner John Ward reflects on these findings as follows:
"The fact that Irish companies have recognised cloud, together with data and analytics, as those technologies most likely to deliver value is really interesting… The ability to aggregate broad datasets and to run models effectively demands a cloud platform."
He goes on: "We see cloud, together with data and analytics, as having a symbiotic relationship and Irish companies need to consider both as they strive to keep pace with their global peers."
Other findings
The study also found that 20% of respondents in Ireland have completed their digital transformation objectives. This is ahead of the global average of 13%.
When asked what they believe to be mission-critical with regard to digital transformation, Irish businesses flag "supportive leadership culture", "seamless integration of data across processes and systems" and "bridging the talent gap".
Thirty-six percent of Irish respondents believe that connecting and integrating diverse systems is the number one obstacle to digital transformation. Thirty-four percent say that it's the establishment and management of corporate partnerships and ecosystems.
For all its benefits, innovation tends to create talent gaps. Existing IT technicians need to be retrained or even replaced. Reflecting this, 54% of respondents see job retention as a challenge when undergoing digital transformation.
How the cloud fits in with other emerging technologies
The cloud is widely seen as a necessary destination for software and apps – but it's part of a broader ecosystem of new digital solutions.
Businesses in Ireland are also looking to the Internet of Things, artificial intelligence and machine learning as critical to their digital transformation. This reflects Ireland's position as a global leader in new technologies.
What are the constraints to digital transformation in Ireland?
In 2022, Ireland experienced a "capacity crunch". Its electricity grid struggled to keep up with the demands of its data centres.
In practice, this meant that several important data centre markets faced power constraints.
Could this slow down the growth of internet resources? It's too soon to say – but it's a question that Ireland, as one of the key European players in the global cloud market, will have to face.
This capacity crunch led the Irish utility company EirGrid to
place a moratorium on data centre construction. About 30 projects were suspended as a result – but since then, Ireland's former Taoiseach Micheál Martin has said that existing projects will move forward.
Dublin isn't the only city that is having to balance the availability of power with the need for data centre facilities. It's an issue seen everywhere from Amsterdam to Singapore.
Despite these challenges, investment in Ireland's cloud infrastructure remains healthy. Chinese giant Huawei has announced that it will create up to 200 jobs in Ireland – part of a €150 million investment in establishing a European cloud services hub here.
The bottom line
Cloud computing is big business – and it's made huge strides over the past decade. These strides were already being taken when the COVID-19 pandemic made them break into a sprint.
This rapid progress creates opportunities and challenges. While cloud investment in Ireland remains healthy – and businesses remain committed to digital transformation – Ireland's grid faces constraints due to the huge amounts of electricity that data centres demand.
Going forward, we're likely to see more of these tensions and constraints – but investment shows no sign of slowing down. Whatever happens, Ireland is a major hub for cloud investment, resources and skills.
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