Silver linings in the data Cloud

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Image caption Cloud computing revenue is set to increase significantly in the next few years

Could the Cloud be the Next Big Thing for the Scottish economy? It's not just about business exploiting the potential revenue streams and cost savings from putting data online and sourcing it remotely from mobile communications.

It's also the potential for locating vast data farms in Scotland. As they use large amounts of energy to cool the servers, Scotland could by the place to be, as it offers both abundant cool air and renewable energy with which to keep those costs down.

The answer from one of the leading figures in the "cloud community" in Scotland is ... er, no. The hopes that Scotland could tap into this booming sector of the global economy as a major centre for data storage are dismissed by Angus MacSween, chief executive of iomart, the specialist hosting company based in Glasgow.

Make no mistake: the sector is huge. Looking at a range of analyst reports, it's suggested the Cloud's global value is on the way from £25bn this year to £148bn by 2014, as business adoption accelerates rapidly.

Another consultants' report suggests a 44-fold increase in the amount of data being generated during this decade, largely through increased video and audio streaming.

Growth and acquisition

There are some companies - large-ish and small - doing good business out of it, seeking out niches where Apple, Amazon and Google don't reach.

Iomart has just published figures that show its investment in data centres and acquisitions in south east England are beginning to turn losses into profits. With revenue topping £25m last year, the company has turned a £2.8m underlying pre-tax profit, up from £1.3m.

MacSween is upbeat on bottom line growth continuing, as the company's investments leave it largely with fixed costs, and it can now build revenue.

The tech entrepreneur also says his bank is keen to lend to him for further growth and acquisition. Not many can say that.

But what about those plans, kicked around Dumfries and Galloway Council's planning department, but now rather quiet, to build at least one, and maybe two gigantic data farms in Lockerbie and/or Ecclefechan?

The idea was that they could use renewable energy to cool the colossal banks of servers, including power from the nearby biomass plant.

Another figure in this so-called "cloud community" says the vast scale of these plans has undermined the credibility of the industry in Scotland, as it's hard for those outside Scotland to take it seriously, at least until they see them built.

Angus MacSween doesn't go that far. But he notes that Iceland has also sought to make itself a centre for data farms, having even cooler air and access to plentiful geothermal energy.

"The advantages of the cool air can be over-played," he told me. "Most of Amazon's data centres are in the desert in the US, so we need to be careful that we don't play that card.

"Why would anyone build a vast data centre in Ecclefechan? People want their data centres to be places they can get to.

"It's reassuring to customers. We have one data centre in Glasgow, but most of the demand we see is in the south, where people want to be within certain distances of data centres."

And he adds: "With renewable energy, we need certainty of power rather than a bunch of windmills."

You can find out more about cloud computing, and how it could impact on Scottish business, by listening to Business Scotland, this Sunday on BBC Radio Scotland at 1005 BST - and again by iPlayer and free download.