Ms Cathriona Hallahan:

I thank the Chairman and members for their invitation to appear before the joint committee to discuss the impact that cloud computing can make in driving efficiencies in government as well as job creation. I am joined by my colleagues, Mr. Karl O'Leary, public sector director for Microsoft Ireland, and Mr. Niall McDonagh our cloud technology leader for western Europe. We welcome the opportunity to discuss the important issue of cloud and its roll-out in Ireland during our national cloud week.

Under the banner of national cloud week, we are running a series of events designed to raise awareness about the opportunities and benefits that cloud computing can bring to the public and private sectors. The opportunity to address this joint committee on this important topic is central to part of the week's activities.

Microsoft as an organisation has been transformed from a product company into a devices and services company, providing solutions to our customers. As part of that transformation, cloud is key. Microsoft Ireland has a 1,200 strong employee base, but we have an extended partner ecosystem of small companies that represents about 40,000 jobs in our ecosystem. We have been in Ireland 28 years and have been evolving from being a manufacturing facility to being an operations core development centre, a sales, marketing and service group but also a data centre, which is the key cloud element of our ecosystem. We are driving and facilitating the move to a solutions and services company in Ireland.

Many will have heard Microsoft staff speak of the potential that cloud has to offer. There has been a small level of deployment on cloud in the public sector, but we believe there is so much more we can do. That is the reason that we are hosting a national cloud week. Cloud has the opportunity to play a significant role in Ireland's economic recovery efforts. It can help deliver the public sector transformation agenda, be a catalyst for growth in the indigenous economy and help to retain our competitiveness and attractiveness as a home for multinational companies in the future. Importantly, we believe cloud can play a significant role in helping Ireland achieve its job creation and growth agenda. We welcome the fact the Government is committed to encouraging deployment of cloud in both the public and private sectors and that it has been identified as a strategic priority in the programme for Government and in the Action Plan for Jobs.

To ensure that cloud has the maximum impact, organisations need to know of its potential benefits and how it can be harnessed to drive growth and achieve efficiencies. Today, in partnership with the Irish Internet Association and Enterprise Ireland, we are announcing an initiative to raise the awareness of cloud to hundreds of small businesses around the country. This was in direct response to a recommendation in the Government's Action Plan for Jobs strategy, which was published earlier in the year. By working in partnership with a range of organisations we can help encourage broader adoption of cloud. We have seen some initial data from a cloud index survey that we commissioned from Amarach Consulting. This will be ready for publication later this week. We will be delighted to send the full set of findings to members.

The early data show that awareness has improved significantly year on year. It also shows that deployment of cloud services is up year on year, particularly among small businesses. It shows the movement towards its adoption in the public sector is slow. If we want to be a leading cloud environment and have a centre of excellence for cloud in Ireland, we need to move faster. As industry leaders in the area, there are a number of pointers, of which we need to take note. When asked to determine the primary barrier to cloud deployment, security and privacy were raised as issues of primary concerns. We have a responsibility to address these continuing concerns and to look for ways to reassure organisations that the cloud is a safe environment for their personal and commercial data. We plan to work with our industry colleagues to develop solutions in this area.

Let me use today's meeting as an opportunity to assure members that the cloud is a trusted environment. It can play a major part in helping to drive efficiencies in the public sector and in facilitating job creation in the wider economy. There are a number of successful examples in which cloud has been deployed effectively on a variety of interesting projects in countries across Europe. Cloud has opened up new possibilities for governments and for the people they serve. With the advent of cloud computing and IT as a shared service, new levels of flexibility, manageability and agility are possible, enabling organisations to deliver services more effectively.

Furthermore, by maximising the use of existing technology infrastructure, governments are able to reduce costs, drive productivity and deliver services across multiple departments and to a broad set of citizens and stakeholders.

We want to share some of the examples with the joint committee, as we believe many of them are relevant in the Irish context. The first one is from Mexico City where citizens now spend just one quarter of the time to have a property deed prepared and registered compared with the past. If we relate this to the Irish environment, we think we could apply the same technology and mechanisms to drive efficiency in areas such as passport and television licence applications.

Government agencies can implement robust solutions that connect valuable data across disparate systems enabling greater insights and new levels of accountability. These solutions help agencies to monitor performance and enable greater levels of transparency on where tax dollars are being spent. For example, the German Government drove a productivity increase of 66% using cloud technology by streamlining access to 400 lines of business applications into a single user interface. Here in Ireland, we know there is a vast disparity of systems across the public sector. This is a real area of opportunity to drive efficiency. The Irish Government can play a role in the growth of cloud computing in Ireland by adopting cloud services within the public sector, taking a lead in the areas of regulation, classifying data and creating open data sets.

In order to drive momentum on cloud and realise necessary cost savings, governments in many countries are putting programmes in place to accelerate cloud adoption in their public service. A number of different approaches are being followed. In the UK, we are seeing a procurement-led approach. The UK government is driving a process to classify public databases on confidentiality levels and certifying a range of cloud services for different levels of data confidentiality, providing a portal that makes it easy for public sector entities to procure these services for prices that have been negotiated centrally.

There are currently 500 supplies offering approximately 3,000 cloud services in the UK. To date, £80 million worth of transactions have been recorded. Several other countries have followed the procurement-led approach in putting framework agreements in place for a range of IT services, including cloud services. This approach is common in the Nordic countries. In Finland, the government has a shared service provider framework contract to one local partner who, within two years, has moved 200 municipalities onto cloud services.

There are other mechanisms as well, like policy-led approaches. In order to accelerate adoption of cloud services in the Federal Government in the US, the CIO introduced a cloud-first policy in 2010. They mandated all federal agencies to identify three services they would move to the cloud. One of these services had to be moved within 12 months and another within 18 months. They then mandated a 40% reduction in their data centre over the following five years. There are multiple methods the government can use to enable cloud computing.

For Ireland to be a leader in the cloud computing area, it is important that we can demonstrate that the Government, its Departments and agencies have seized the opportunity to lead innovation through cloud technology. In June 2012, the Department of Public Expenditure and Reform published details of its cloud computing strategy. We welcome that strategy and look forward to its implementation. We believe that the approach outlined within the strategy provides a strong foundation upon which a series of cloud-enabled efficiencies can be introduced in the Irish public sector. We welcome the opportunity to partner with the Government on this task.

Before concluding, I wish to touch briefly on the issue of skills. We are all only too aware of the unemployment challenge the country faces. As has already been stated, we believe that the cloud can be a catalyst for economic growth and job creation. In the short term, we at Microsoft are finding opportunities for our unemployed youth through our youth-to-work initiative. We are working with FIT - that is, Fast-track to IT - to help support the development and training of 10,000 young people over the next three years. Many of these young people will participate in training for the cloud. They will have the skills to enable them to help with the objective of making Ireland a cloud centre of excellence. As we know, there are vacancies in the IT sector and it is imperative that we do what we can to ensure that our unemployed young people are equipped with the skills to fill these vacancies.

I wanted to use the opportunity of our visit today to thank the joint committee for its continued commitment to addressing unemployment issues and for its focus on job creation. My colleagues and I would welcome the opportunity to respond to any questions that members of the committee may have at this time.