Dr Ott admits that the jury is still out on NADA's potential as they haven't yet fully demonstrated its capabilities on par with existing delivery methods.

"But we definitely think if we actually harness all those processing and storage capabilities on the edge, then we don't need a lot of those data centers."

The NADA project is convincing enough to have attracted some of Europe's largest telecommunications companies. Set top box manufacturer, Thomson SA, and European ISP, Telefonica, are among nine contributing partners to the NADA project.

"Telefonica is a key partner and they are running a trial video service to deliver TV, educational videos etc with a Peer-to-Peer client from inside their cloud, and it's been very successful. And we have Thomson SA, one of the largest set top box manufacturers in the world, so they can clearly see the benefits," Dr Ott said.

"The main thing now is if we can demonstrate the benefits, how quickly will the companies turn it into a commercial outcome."

According to NICTA, the NADA project represents a paradigm shift toward highly distributed service delivery platforms and its results promise enhanced performance of home entertainment networks, low-cost content delivery and support for new applications in the online games arena.

Dr Ott said it was the first time NICTA has been included in the FP7, and indicates that Australian ICT research is considered to be at the forefront of the international stage.

"I am delighted NICTA's research into advanced communications architecture and distributed services has been recognised for the world-class contribution it can make to future applications and research platforms. Gaining a place in the highly competitive European Commission Framework program is a tribute to the international standing of NICTA researchers."