Cloud Computing’s Employment Boom
March 5, 2012 – Along with spending and hype, cloud computing will generate millions of jobs, especially from SMBs, over the next few years, according to a new IDC white paper sponsored by Microsoft.
The market review, entitled “Cloud Computing’s Role in Job Creation,” forecasts 13.8 million new jobs from public and private cloud IT services worldwide by 2015 – with half of those expected this year – and cloud revenue reaching $1.1 trillion over that same time period. Of those anticipated hires by 2015, IDC expects more than half (7.5 million) to come from enterprises with 500 or fewer employees. Prevailing thinking from the research firm is that SMBs have fewer ties to legacy systems and more limitations with IT budgets compared with their larger competitors, leading to a pool of indirect IT job growth.
Across specific industries, IDC predicts cloud jobs for communications and media to lead the way with 2.4 million hires by 2015, propelled by growing customer expectations covered by as-a-service offerings. Another batch of cloud positions are expected to be generated from process manufacturing (854,000) and discrete manufacturing (1.3 million), as manufacturing includes many SMBs looking for more on-demand collaboration and CRM, according to IDC. Banking and financial services will spend more on the cloud to meet customer needs, resulting in approximately 1.4 million cloud jobs by 2015. However, regulations and compliance, especially in the U.S., will dampen some cloud deployments and subsequent job growth in the banking sector, as well as health care (357,000) and insurance (673,000).
Regionally, the U.S. is expected to continue its dominance in private and public cloud spending. IDC foresees 1.17 million jobs in the U.S. from this cloud spending, with the largest percentage growth in municipal hires coming in its largest population centers: New York City, Los Angeles and Chicago. However, the big spike in hiring will happen overseas, as China and India are expected to take on more than 6.7 million new cloud jobs by 2015 due mostly to their vast workforces and aggressive cloud adoptions.
John F. Gantz, chief research officer and SVP at IDC, said in a news release on the report that innovation and efficiencies from the cloud will not only increase deployment over the next few years, but also smash the idea that the cloud is a “job eliminator.”
“[J]ob growth will occur across continents and throughout organizations of all sizes because emerging markets, small cities and small businesses have the same access to cloud benefits as large enterprises or developed nations,” Gantz said.
In a review of cloud spending dedications in 2011, professional services led industry sectors with 5.5 percent of its total IT budget going to the cloud, followed by insurance and transportation (4.5 percent, respectively). At the low end of spending on cloud services last year was the government sector, though that, too, is expected to change from planning at the federal level and growing interest from state and local institutions.
IDC’s job calculations were based on factors such as available workforces, unemployment rates, GDP, IT spending by industry and enterprise size, and technology infrastructure, as well as discussions with CIOs. Click here for a PDF of the 14-page report.
The Microsoft-sponsored report came days after its Azure cloud platform suffered outages in the U.S. and Northern Europe due to a Leap Day software bug.