Businesses are set to be offered huge opportunities by cloud computing, but firms will also face challenges as they adopt the technology, according to a new report.

 

Innovation Minister Kim Carr launched a report titled The potential for cloud computing services in Australia, prepared by Lateral Economics for Macquarie Telecom.

 

According to the report, more than 71% of Australian firms are already using some form of cloud service; a 31% increase in the space of two years.

 

“Given the growth in Gmail and Dropbox, and with Apple introducing iCloud, consumers have a key interest in this technology,” Carr said at the launch.

 

“The world-class National Broadband Network, for example, presents us with a huge opportunity to service demand.”

 

Carr said while cloud computing is an emerging area with “immense potential” for Australian business, it also presents its fair share of challenges.

 

“There are major issues around risk management, sovereignty, data security, privacy and service quality that need to be thoroughly debated,” he said.

 

“A local cloud capability will give us a say in these issues. Our political stability, and the stability, transparency and integrity of our institutions, can set Australia apart in the industry.”

 

The Government has tasked the IT Industry Innovation Council to conduct a more in-depth study into the nature of cloud computing in Australia.

 

According to Dr Craig Mudge, of the Australian Academy of Technological Sciences and Engineering, businesses can benefit from all aspects of cloud computing.

 

“SMEs can overcome some of the advantages that their bigger competitors have had in the past such as the capital-intensive hardware investments needed to provide service,” Mudge says.

 

“While SMEs are enthusiastic about cloud computing, they also have concerns. While some of these concerns would also be shared by larger companies, SMEs face greater difficulties in addressing them.”

 

“Barriers to adoption of cloud computing by business include the cost of migration to a cloud model, fear of lock-in to one cloud service provider, data security and the lack of large-scale data centres in Australia.”

 

Nevertheless, Mudge says some Australian companies are evaluating the cloud and some are using it already, often through Amazon Web Services.

 

“However, massive scale is needed to get the most business value from the cloud computing concept.”