'Cloud computing will destroy jobs'

10 February 2012

Automation in the cloud does not bode well for technical IT staff

21 June 2010 Pete Swabey

The use of cloud computing may well reduce the need for internal IT staffing, but will this be balanced by increasing demand for employees among suppliers, or will the total number of IT jobs fall?

Business technology and employment levels have always been linked, but the nature of the relationship hasn’t always been clear.

At face value, any technology that improves worker productivity – as most IT innovations have claimed to – in theory reduces the number of workers required. But, of course, successful technologies also create jobs, as they require people to build, sell, implement and operate.

This is one possible explanation of why IT has only been shown to improve economic productivity in the US, where much of the industry has historically been based.

The latest chapter in this ongoing drama is the advent of cloud computing. In one sense, cloud is just the latest form of outsourcing, moving the workload from end-user organisations to third-party suppliers. The most significant economic impact of the outsourcing boom so far has been to move technical jobs to offshore destinations such as India.

But there is something different about cloud computing. The high degree of virtualisation used in cloud environments makes them ripe for automation, which by its nature removes the need for staff.

Indeed, this is arguably what makes cloud computing viable – previous attempts to provide computing on a utility basis, such as Sun Microsystems’ Network.com, have mostly failed. The movement of IT work to the cloud, therefore, may have a more destructive impact on employment levels than traditional IT outsourcing.

In May 2010, Hewlett-Packard announced that it was to cut 9,000 jobs from its IT services division as it consolidated and automated its data centre operations, the final stage of its integration of EDS, the outsourcing supplier it acquired in 2008.

Some observers were sceptical of HP’s justification of the cuts – “If you can replace 9,000 jobs with ‘automation’, you must have just invented some earth-shattering technology,” remarked one analyst – but the episode has raised the question of what the long-term impact of the cloud might be.

Clive Longbottom, QuoCirca Clive Longbottom, an IT analyst for QuoCirca, believes that cloud computing puts even greater pressure on IT professionals to acquire business skills

Technical IT jobs will be massively threatened [by cloud computing]. Automation based on provisioning functions to commodity hardware will not require much in the way of skills, and for the majority of data centres it will be lights out.

Where the skills will be required is at the business process/technical capabilities level: those people who can listen to what the business is saying its needs are and then ‘translate’ this into which functions are available already and which must be obtained from external providers. This requires a different approach to IT and different skills, and only a small number of techies will be able to make the change.

Dominic Monkhouse, PEER1 Hosting Dominic Monkhouse, UK managing director of PEER1 Hosting, is optimistic that cloud will create more jobs than it destroys

Cloud has been and continues to be a huge driver for the IT sector, and while job losses are an inevitable part of any change, so should job creation arise out of this evolution. Cloud should see an increase in the number of start-ups that spring to life, developers will be able to expand as a result of the efficiencies of on-demand provisioning and, of course, cloud providers themselves will need more staff with the right skills.

There will be a shift in where the jobs are and the roles that teams play, but the optimist in me believes that, ultimately, more jobs will be created as businesses prosper and grow.

Comments [2]

Frank Bennett
Wednesday 23rd June 2010

Maybe yes maybe no. Another aspect of 'jobs' is highlighted in a report by the World Economic Forum that in assessing the impact of the Cloud consider 1M jobs could be created over the next 5 years and that gets the attention of governments that are struggling with the welfare costs of those unemployed. It says those jobs will be created by startup businesses that need to equip with ICT at a price they can afford while cash is in short supply - that points to the Cloud. VCs are also directing their investments in startups to use the Cloud to increase allocation of funds to R&D and sales and marketing. Potentially game changing and the message is don't get left behind.

David McLeman
Wednesday 23rd June 2010

Irrespective of the advance of Cloud Computing, IT departments must refocus if they are to be successful in meeting the needs of today's businesses, and must become advocates for how the organisation can exploit technology to best commercial advantage, rather than simply manage its performance.

In a world of doing business over social media-based tools such as LinkedIn and Facebook, that are inherently outside the control of the IT department, in-house IT departments are in severe danger of simply not delivering enough value to the business if they resolutely stick to the procurement and management of hardware and software.

As such, Cloud Computing cannot continue to be seen as the threat to jobs that many IT staff fear. It actually has the potential to increase rather than decrease opportunties for the IT professional – team members can be released by Cloud Computing from low-level technical roles into areas such as project management, business change and supplier management, where there is also more opportunity to transfer those skills to other projects, rather than remaining in a particular niche.

These new roles are deemed to be more rewarding and more substantive by the business because IT staff are now directly adding value, rather than simply fixing problems and maintaining performance.

While it may not be an environment everyone will necessarily feel comfortable in, IT departments must move from traditional IT thinking, based around managing machines and working to long release cycles, to instead managing projects, suppliers and service level agreements in a fast-changing technical environment. Cloud Computing, rather than posing a threat, in fact offers the perfect catalyst for such a change.

David McLeman
Managing Director
Ancoris
www.ancoris.com

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