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The data gathered from these interviews was combined with "an extensive Australian and international literature review to develop a credible scenario for the uptake of, and likely productivity increase resulting from, cloud computing services across the Australian economy."

KPMG then employed its in-house Computable General Equilibrium model of the Australian Economy to estimate the potential productivity impacts of cloud computing adoption on long run GDP.

The report explains: "In essence, organisations' capital and operating expenditures on ICT are measured before and after implementation of the cloud. Any reduction in cost per unit of production is then incorporated into the model, which effectively replaces the relevant spending on a unit of ICT with spending on a new input that is cloud computing services.

"As a result of the productivity gains from cloud computing, firms either produce an increase in output from the same level of inputs, or output in the implementing enterprise is held steady freeing up resources for alternate forms of production. KPMG's CGE model allows for these changes to occur over a 1O-year period of adjustment, after which time the impact on GDP is then measured."

Based on its consultations and its international literature review, KPMG estimated that ICT capital (capex) and operating (opex) expenditures would significantly reduce over the 10-year period modelled. For each unit of output it estimated that opex would decline by 25 percent and capex by 50 percent.

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