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News : Innovation Last Updated: Jul 18, 2012 - 9:18 AM

Cloud Computing: Weak and uncompetitive indigenous Irish cloud computing sector
By Michael Hennigan, Finfacts founder and editor
Jul 18, 2012 - 8:02 AM

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Cloud Computing: The delivery of computing services from remote locations to a web browser has received a lot of attention in recent years and in Ireland it has been hyped as the next IFSC (a reference to Dublin's International Financial Services Centre). However new research on worldwide patenting activity by Irish resident applicants and inventors, shows an industry dominated by international firms with a relatively weak and uncompetitive indigenous Irish cloud computing sector.

On adoption by end users in Ireland, last April the new Microsoft / Amárach Cloud Index, which is designed to measure progress toward adoption of cloud computing by tracking actual adoption in Ireland by organisations across the public and private sectors, showed that the index was at 3.2 out of 10. This was based on the mean score for all responses to a question specifically on adoption of cloud computing.

Research by New Morning IP, a Dublin-based intellectual property consultancy, was based on searching the full text of the main English language patent authority databases, and title, abstract and claims of other language databases including the German, Japanese, Chinese and Korean databases. The search took place in early June 2012 and after elimination of patent family duplicates (number of patent families is a good proxy for number of distinct inventions filed) yielded 28,167 published patent application or granted patent records relating to cloud computing.

New Morning IP says that of the 91 published inventions by Irish resident applicants, only 46 have named one or more Irish-resident inventors. This indicates that half of inventions filed by Irish resident applicants were in fact invented outside of Ireland.

The consultants say that the distribution shows that filing of cloud computing patent families by Irish resident applicants is dominated by three global companies; Accenture and Skype (acquired by Microsoft in 2011), and Business Objects Software (acquired by SAP AG in 2007). They collectively account for almost half of the total. Many of these publications lack Irish resident inventors indicating that the Irish company is acting as a holding company for all or a portion of the wider group’s patents.

New Morning IP says: "Our analysis shows that while Ireland is an attractive location for multinational companies to develop and hold cloud computing patents, indigenous Irish companies do not seem to have adopted strategies to build globally significant patent positions to protect their technologies from being copied and to use as collateral should they become large enough to be targets for patent infringement attacks.

In our view the relative strength of the foreign direct investment sector should be used as a lever to incentivise and facilitate the creation of cloud computing patents by Irish companies and third level research institutions."

Cloud Computing: The Irish Perspective [pdf]

Finfacts comment: While patents do not imply potential for commercialisation; the software patent system is in flux and patent quality has deteriorated in recent decades according to the Organisation for Economic Cooperation and Development, nevertheless, the low level of patents granted to indigenous firms and research institutions, is a serious issue.

Cloud computing has been highlighted as a priority for the Government and the total public science budget in 2011 was €2.3bn.

The green energy boomlet has already stalled in the US and Germany in the face of Chinese competition. This sector was also a fertile one in Ireland for large jobs estimates decades ahead.

However, cloudy aspirations eventually lose gravity.   

Finfacts Jan 2011:Cloud computing industry can be the next IFSC in Ireland says report; Hype or substance?

Finfacts Apr 2011:Cloud Computing and the Irish Economy: A clouded issue?

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