New Cloud Jobs Are Just Vapour
Resarch from IDC and Microsoft claims that the cloud will create 14 million jobs. Clive Longbottom does not agree
IDC research sponsored by Microsoft has predicted that the cloud will create nearly 14 million jobs over the next few years. But how realistic is that?
Previous advances have certainly made new jobs. I reckon that the advent of the PC must have created a few tens of millions of jobs and trillions of dollars as well, as did the advent of the mainframe, of the web, of client/server computing and probably Angry Birds.
But the holy grail of any business is to automate as much as possible, as it gets rid of those pesky humans that make errors and cost money. Technology is a great way of automating things. As technology has taken over, high-cost labour markets have seen increasing unemployment levels. This is reasonable causality, to my mind, and will only increase as technology improves and becomes even more ubiquitous.
Many jobs will go
So, how will cloud create jobs? It won’t in reality. IT staff will be the first in line – massively shared public and hosted shared clouds will require far fewer personnel to look after them than existing distributed data centres – cloudified or not.
Using greater functionality from the cloud will mean that certain skills won’t be required within organisations any longer – such as deep knowledge of e.g. cross-border tax and duty laws, of laws around expenses, of how standards interoperate at a technical level and so on.
Increasing use of automation across organisations will get rid of functions within purchasing and legal departments. More automation of product creation will result in fewer blue collar jobs and so on.
So, where are the new jobs coming from? It would seem that this is all predicated on new companies starting up based around using cloud as a platform. Fine, yes – I can see that not having to factor in the need for technical skills and for a data centre or two along with hardware, software and maintenance can make the difference between setting a business or not setting up a business.
But – if we take a conservative estimate that cloud automation will displace 10 million jobs worldwide due to their capabilities being replaced, IDC’s figures only show an overall increase of 4 million jobs – and it could still be an overall jobs loss. Even at the 14 million jobs level from new start-ups, this would require such entrepreneurial start-ups to be large employers. Let’s be generous and say that each start-up will employ 100 people – that’s 140,000 new companies that will be started that would not have been started if cloud wasn’t there. If we try a dose of reality and say that most start-ups have around 10 people, we’re looking at 1,400,000 start-ups that only come into being due to cloud.
Cloud: game changer, not a company creator
All told, I don’t believe it. Yes, lots of businesses will be starting up over the time period, and they will choose cloud as their platform of choice, as it makes sense. They will also choose to use smartphones and tablets, alongside VoIP and maybe have a flat screen OLED TV in reception. This does not mean that OLED screen technology will create 14 million new jobs, does it?
Cloud is important, and it is a game changer. It will help define companies that win against those who stick with old-style platforms. It does not, however, create a winning company in itself – this is down to the ideas behind the company, how good its basic processes are, how well its go-to-market strategy is defined and implemented, and how successful the management and workers are in themselves.
This is nothing to do with technology – it is to do with basic business practice. There will be, as there always have been, many failures of companies that have been started up with a technical underpinning of pure cloud, just as there have been failures of companies that went for the mainframe, for client/server, for web-based computing and so on.
The cloud will certainly bring changes, and there will be big winners and new companies. But to credit the cloud alone with an expansion in jobs is nonsensical.
