Depending on which survey or story you read, the cloud can be either a good thing for IT workers and their job security, or it can be terrifying.
For example, a study by Microsoft and IDC recently predicted that cloud computing will create 14 million jobs internationally by 2015. But those aren’t just IT jobs, they are jobs spread around the entire world, across all industries.
For IT shops, the news may not be as bright: A study by IT service provider CSC concluded that 14 per cent of companies reduced their IT staff headcount after deploying a cloud strategy.
As businesses embrace the cloud, experts say there will still be a need for IT staff in the enterprise, but there will be a need for different types of IT workers. Instead of managing infrastructure, tending the help desk and commissioning server instances to be created, IT workers of tomorrow are instead more likely to be managing vendor relationships, working across departments and helping clients and workers integrate into the cloud.
“The No. 1 reason most enterprises are going to the cloud is cost savings,” says Phil Garland, of PricewaterhouseCoopers‘ CIO advisory business services unit. The largest line items in enterprise budgets are traditionally labor, so as enterprises deploy the cloud, it will reduce the number of staff needed, he says.
But, this doesn’t necessarily mean that IT jobs are gone with the wind. In fact, while 14 per cent of businesses surveyed by CSC cut IT staff, another 20 per cent actually increased staff.
“It really depends on what the enterprise is doing in the cloud,” Garland adds. “In most cases, it’s a shift of responsibilities instead of wholesale cutting or hiring.”
Take the example of Underwriters Laboratories in North Carolina, a 9,500-person company that provides third-party inspection and certification services to more than 50,000 businesses around the world with its trademark UL symbol.
In August, the company transitioned from an in-house managed deployment of IBM communications systems Lotus Notes and Domino, to a cloud-based SaaS offering of Microsoft Office 365. “We needed something that would be much more elastic,” says CIO Christian Anschuetz. The company has executed a handful of mergers and acquisitions in recent years, and it expects more in the future. Anschuetz wanted a simpler way of deploying increased instances of communications systems without the need to add infrastructure to support it.
The migration to the cloud took about eight weeks and it created an almost immediate shift in the firm’s IT needs. UL no longer needed workers to manage its communications platform, email servers and chat functions. Despite cutting in those areas, Anschuetz says his IT budget has tripled since the cloud adoption.
“Most people think that with such a deployment we would be drawing down our services to make them more cost-effective,” he says. “Our internal IT is growing.”
The greatest need for services in UL’s new system is for customer-facing employees that can help UL clients integrate into the company’s platform. As a firm that oversees product development and manufacturing, Anschuetz says customers want UL workers to be involved in the product lifecycle as early as possible. A cloud-based system, he says, allows UL to work more closely with customers on product development. Instead of a face-to-face meeting, or emailing documents back and forth, now documents are hosted in a cloud environment that both UL and the customer have access to, allowing for greater collaboration, he says.
“UL has realized the elasticity that the cloud provides us is of great value in the marketplace,” he says. “It allows us to develop new applications and regenerate relationships with customers.” Because of the value it creates for the business, UL is adding workers that help manage the cloud integration efforts.
This is the reasoning IDC and Microsoft used in its study claiming the cloud will help create 14 million jobs in the next five years.
“By offloading services to the cloud, you increase the amount of budget you have for new projects and initiatives, which are the things that truly lead to new business revenues,” says John Gantz, an IDC researcher who studies technology economics.
Three-quarters of IT spending today, he says, is on legacy systems and upgrades, with the remainder on new products. If an enterprise cuts system management costs, that creates additional resources for new projects and initiatives, which drive revenues and can potentially create jobs. Although, Gantz stresses, those may not be in the IT department.
In the short term, cloud deployments can create an increased need for IT staff to manage the transition and monitor the new cloud system and vendors. In the long term, however, the cloud generally creates efficiencies and reduces IT staffing jobs in an enterprise, he says. On a macroeconomic level, Gantz doesn’t see the cloud having a macroeconomic impact. Some of the jobs lost in individual companies could be offset by increases in staffing needs by cloud vendors, he says.
David Moschella, global research director for the Leading Edge Forum at CSC, agrees that IT investments usually lead to a drop in staffing needs for a company.
“Businesses can be run with less people because of technology advancement,” he says.
Traditionally there has been an argument that when jobs are eliminated in one area, they can be increased in another. Moschella believes that will be the case, but he says it’s too early to tell exactly which areas will be the beneficiaries of the job boom the cloud can provide.
What is expected is that traditional IT roles of managing software and hardware will no longer be needed in the new cloud-heavy world.