We can be winners in next technology revolution
Developing freezones to encourage green data centres could be a key component in boosting Ireland's green economy as the notion of 'cloud computing' looks set to be the next big thing, says Aongus Hegarty of Dell
Published 25/07/2010 | 05:00
THE race is on for Ireland to become a smart economy. We have undergone significant transformation as an economy, moving from a low-cost manufacturing base to a point where Ireland is home to companies now engaged in R&D and high-end value-add services.
Dell is a case in point. Today Dell Ireland is a strategic global hub for sales, services and operations, employing more than 2,300 people in Dublin and Limerick. As a nation we need to look at the industries that are emerging in this space, and place some bets on which ones will succeed.
A smart economy is a green economy -- and as technology will be a key driver in delivering the smart economy, there is a big opportunity for Ireland to develop a lucrative green technology sector.
Estimates put the size of the global environmental goods and services market as exceeding €950bn. The value of this sector for Ireland is growing and was estimated to be more than €2.8bn in 2008.
It is widely recognised that the next big revolution in technology is "cloud computing", which will see IT infrastructure managed centrally and users consume it like a utility. There needs to be more focus on how Ireland can go about leveraging the global cloud revolution to attract investment and create employment. Cloud is ultimately a green technology as it will remove individual, redundant and partially-used systems from offices and homes and into specially managed data centres, which are becoming more environmentally friendly all the time.
I believe there is a major opportunity for Ireland to build on the Government's planned green IFSC initiative, which will attract green tech investment and carbon-reduction companies, by also introducing a "green data centre freezone". This will offer the world's mega data centres -- the homes of "cloud computing" -- incentives to locate in Ireland, bringing in major investment.
It also builds on a number of Ireland's strengths -- we have a legacy in technology built up over the past three decades and a workforce skilled in this area; many of the cloud players are already based here and have operations in Ireland. The Dell data centre in Limerick hosts Dell applications across Europe, the Middle East and Africa. Dell Services, which has a large team in Limerick, is also designing, selling and servicing applications within Ireland.
We also have the know-how and expertise to ensure the success of a freezone from previous successful initiatives like the Shannon Duty Free Zone or the IFSC.
The Government has a stated objective to develop the green economy and this would be part of a complementary, integrated strategy to develop Ireland as a global green leader by positioning the country as the optimum location for green data centre investment.
It may sound airy, but cloud computing has the potential to have as much impact on how businesses and organisations operate as the internet did.
Cloud computing will see an end to organisations hosting their own computing infrastructure. Instead, they will use computing in the way that we now use gas or electricity or any other utility -- they will buy it from a central source as and when needed -- giving the opportunity to scale up and down as demand dictates and delivering greatly enhanced security to end users. This offers huge upfront capital savings to businesses and ongoing efficiency gains in the way that the energy is used.
Green Data Centres
The infrastructure to run computing in this new world will be housed in mega data centres.
Data centre design and development is getting greener all the time. Ireland also has the perfect climate for data centres as we can use our ambient temperature to cool data centres, reducing the need for mechanical cooling -- a huge cost and user of energy in data centres.
The green data centre freezone would offer companies the opportunity to host their IT infrastructure in a designated zone, with all the connectivity, power and other utilities that are required to be run or facilitated by the State.
Special tax incentives would be offered to act as an incentive for those who bring these capital investments to Ireland, creating much-needed construction jobs and maintenance roles, in addition to the technical roles to run the IT equipment itself.
By establishing Ireland as the green "home" of cloud computing, not only will it attract significant FDI, it will have a knock-on effect and attract R&D and other industries and investments, thus creating job opportunities. It should also deliver significant impetus to create a healthy indigenous sector.
To incentivise start-ups and to ensure the growth of an indigenous green technology industry, the Government should consider giving companies special tax breaks for work which can be classified as being under the cloud and green umbrellas.
This will also help to fast-track the commercialisation of R&D done in this sector.
Aongus Hegarty is a Dell vice president and general manager for small and medium business, Europe Middle East and Africa
• Series compiled by John Reynolds