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Economic and Social Impacts of Google Cloud September 2018 Economic and Social Impacts of Google Cloud |

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Economic and Social Impacts of Google Cloud September 2018 Economic and Social Impacts of Google Cloud | Economic and social impacts of Google Cloud September 2018 Economic and social impacts of Google Cloud | Contents Executive Summary 03 Introduction 10 Productivity impacts 15 Social and other impacts 29 Barriers to Cloud adoption and use 38 Policy actions to support Cloud adoption 42 Appendix 1. Country Sections 48 Appendix 2. Methodology 105 This final report (the “Final Report”) has been prepared by Deloitte Financial Advisory, S.L.U. (“Deloitte”) for Google in accordance with the contract with them dated 23rd February 2018 (“the Contract”) and on the basis of the scope and limitations set out below. The Final Report has been prepared solely for the purposes of assessment of the economic and social impacts of Google Cloud as set out in the Contract. It should not be used for any other purposes or in any other context, and Deloitte accepts no responsibility for its use in either regard. The Final Report is provided exclusively for Google’s use under the terms of the Contract. No party other than Google is entitled to rely on the Final Report for any purpose whatsoever and Deloitte accepts no responsibility or liability or duty of care to any party other than Google in respect of the Final Report and any of its contents. As set out in the Contract, the scope of our work has been limited by the time, information and explanations made available to us. The information contained in the Final Report has been obtained from Google and third party sources that are clearly referenced in the appropriate sections of the Final Report. Deloitte has neither sought to corroborate this information nor to review its overall reasonableness. Further, any results from the analysis contained in the Final Report are reliant on the information available at the time of writing the Final Report and should not be relied upon in subsequent periods. Accordingly, no representation or warranty, express or implied, is given and no responsibility or liability is or will be accepted by or on behalf of Deloitte or by any of its partners, employees or agents or any other person as to the accuracy, completeness or correctness of the information contained in this document or any oral information made available and any such liability is expressly disclaimed. All copyright and other proprietary rights in the Final Report remain the property of Deloitte Financial Advisory, S.L.U. and any rights not expressly granted in these terms or in the Contract are reserved. This Final Report and its contents do not constitute financial or other professional advice, and specific advice should be sought about your specific circumstances. In particular, the Final Report does not constitute a recommendation or endorsement by Deloitte to invest or participate in, exit, or otherwise use any of the markets or companies referred to in it. To the fullest extent possible, both Deloitte and Google disclaim any liability arising out of the use (or non-use) of the Final Report and its contents, including any action or decision taken as a result of such use (or non-use). 02 Economic and social impacts of Google Cloud | Executive Summary Executive Summary This study analyses the Economic and social impacts of Google Cloud across 14 different markets1. Key findings are based onDeloitte’s public Cloud business users survey, conducted with 1488 IT decision makers using Cloud services from any provider, and a further Google Cloud business case studies survey, conducted with a further 80 IT decision makers among some of the most successful Google Cloud users. Both surveys include IT decision makers from SMEs and large businesses2. 1. Benelux, France, Germany, Israel, Italy, Japan, Nordics, Saudi Arabia, South Africa, Spain, Turkey, United Arab Emirates, United Kingdom, United States. 2. The Cloud business users survey interviewed IT decision makers from 1185 SMEs and 303 large companies, and the Google Cloud business case study survey interviewed IT decision-makers from 47 SMEs and 33 large companies. 03 Economic and social impacts of Google Cloud | Executive Summary Economic and social impacts Cloud technology is driving revenue growth and cost savings across both small and large organisations, providing on-demand access to powerful and flexible IT resources and tools. Millions of businesses are now benefiting from Cloud technology, including some of the smallest businesses and start-ups. The business impacts of Cloud quantified in this study include3 : Average net return of 5% An illustrative example in a small company: up to $2.5 for every $1 Average 5% of users’ revenue is Average Net Return on Investment Cloud enabled. of up to $2.5 for every $1 invested in $1Million $50,000 Cloud services4, with higher returns revenue extra revenue also possible, for both SMEs and large companies. 6-10% 70% Average increase in the customer base of 6% to 10%. 70% of companies have used $3,800 Cloud to develop new products, saving in IT capex services or business models, to enter new markets, or to 19% enable other product or service Average 19% IT capital innovations. expenditure (CAPEX) reduction. 20 Additional staff time employees One ull time employee More than 300,000 that can be deployed in other productive tass5 More than 300,000 businesses across 2 to 3 hours the countries covered in this study Average staff time savings of 2 to could not operate at all without Cloud, 3 hours per employee per week. including start-ups with new b usiness omany eature models enabled by Cloud. eut it oud 3. Deloitte analysis based on the public Cloud business users survey 4. The sample consists of users of Cloud from various providers including Google among others 5. IT capex assumed to represent 2% of revenues. Figures are based on average responses and are for illustrative purposes. 04 Economic and social impacts of Google Cloud | Executive Summary Google Cloud in particular offers distinctive The magnitude of business and productivity features supporting productivity and innovation, impacts from use of public Cloud and Google including its open source ethos and accessible Cloud is estimated in this study relative to a machine learning and AI tools, helping to scenario where only on-premise solutions democratise access to these technologies are available. The study therefore does not measure the impact relative to other providers. across small and large organisations. The open source nature of tools such as Kubernetes also Businesses also use Google Cloud services facilitates the use of multi-cloud solutions and in ways that have a variety of social impacts, portability of workloads between different such as helping to improve patient outcomes Cloud platforms, increasing flexibility for in healthcare and educational results for students. Healthcare applications range from customers who can benefit from using multiple pre-trained Artificial Intelligence/Machine Cloud platforms with complementary features. Learning models for image and speech The business impacts of Google Cloud recognition to support patient care to Google quantified in this study include:6 Genomics, capable of quickly analysing petabytes of genomic information. • Net returns in the order of $10 for every $1 spent on average are reported by some of the most successful Google Cloud users. • Aggregate productivity impacts including revenue expansion and cost savings across all Google Cloud users in the order of:7 $3 billion $300 million $100 million $10 million to $9 billion to $1.2 billion to $600 million to $70 million $3 billion to $9 billion in the US. $300 million to $1.2 billion per $100 million to $600 million $10 million to $70 million per country in other large Cloud per country across the country across relatively small markets – UK, Japan Nordics, France, Benelux, Italy, Cloud markets – South Africa, and Germany. Israel and Spain. Saudi Arabia, Turkey and UAE. 6. Results from the Google Cloud business case studies survey. 7. Based on the average estimated net return on investment of $1-$2.5, and total investment estimated to be associated to Google Cloud in each country. 05 Economic and social impacts of Google Cloud | Executive Summary Key challenges: individually, including more sophisticated data encryption, superior physical security of data Despite Cloud’s benefits, barriers to Cloud centres, advanced authentication methods, adoption still exist, including limited awareness access to cutting-edge solutions for novel of its benefits and its security features, and threats and automatic processes such as regulatory barriers related to the cross- security updates. border flow of data. In Deloitte’s Cloud public businesses users survey, half of respondents Though adoption is increasing, only 46% of mention security concerns as a barrier to Cloud large businesses and 22% of small and medium adoption while one in three mentions skills and enterprises in OECD countries have made the capabilities within the business. leap to Cloud8. The prominence of data security concerns Policymakers can boost their economies as a barrier to Cloud adoption reflects the by undertaking measures to address these importance of online security in today’s barriers, working alongside industry. economy. While there is sometimes a Through the study of best practices in a perception that keeping data on premise or number of jurisdictions, as well as interviews in a country is more secure, different features and surveys, this study proposes a list of of Cloud can lead to enhanced security. Cloud actions for policymakers to foster Cloud providers can offer security capabilities that adoption across five areas: would not be available to most organisations Develop a national Review existing Develop guidance for Provide resources and Promote interoperability strategy to prioritise Cloud requirements to store businesses on the support for businesses and data portability (“Cloud First strategy”). data in the country. benefits of Cloud and best to facilitate transition to through open standards practices for adoption.
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