DETROIT – Spending on public and private IT cloud services will generate nearly 14 million jobs worldwide from 2011 to 2015, according to a new study by the analyst firm IDC. The research, commissioned by Microsoft, also found that IT innovation created by cloud computing could produce $1.1 trillion a year in new business revenues.
“The cloud is going to have a huge impact on job creation,” says Susan Hauser, Microsoft corporate vice president of the Worldwide Enterprise and Partner Group. “It’s a transformative technology that will drive down costs, spur innovation, and open up new jobs and skillsets across the globe.”
One way in which the cloud is helping companies to be more innovative is by freeing up IT managers to work on more mission-critical projects.
“We deployed Microsoft Office 365 and Windows Intune for one of our clients, and the comment we heard from the chief operations officer is that he can actually schedule a meeting with the IT director to talk about strategic applications,” says Carol Reid, sales director for Agile IT, a Microsoft Tier 3 Cloud Champion Member headquartered in San Diego, Calif. “Whereas before, the IT director was chasing fires and tending to pretty basic plumbing, he now has the bandwidth to pursue truly strategic projects that move the business forward.”
In addition, many businesses are using the cloud to improve how they work with customers and partners.
Cloud Computing & Worldwide Job Creation
A new Microsoft-funded IDC study shows businesses that move to the cloud are freeing up time and money to invest in innovation and job creation. Among the study’s findings:
- Cloud computing will create nearly 14 million new jobs between 2011 and 2015.
- By 2015, business revenues from IT innovation enabled by the cloud could reach US$1.1 trillion a year.
- Cloud-related jobs will accrue evenly to businesses with 500 or fewer employees and those with more than 500 employees.
- More than one-third of cloud-enabled jobs will occur in the communications and media, banking, and discrete manufacturing industries.
- China and India will account for about half of all new cloud-related jobs.
“One of the trends we’re seeing is that companies are using cloud-based collaboration software not just for their internal employees, but to engage and share information with partners and vendors,” says Aaron Nettles, co-founder and CEO of Vorsite, a Microsoft Tier 3 Cloud Champion Member based in Seattle, Wash. “So it’s really not just about maintaining technology but also about leveraging it to drive revenue for the business.”
To accommodate the growing interest in the cloud, Nettles plans to double the size of his workforce this year. “It seems like a threshold has been crossed where customers are no longer asking, ‘Is the cloud right?’ but ‘When can we get it deployed?’”
Among the enterprises making use of the cloud to boost innovation is Underwriters Laboratories (UL), a global company that provides safety testing and certification for a wide range of product categories. In recent years, the company has acquired several businesses to broaden the services it offers to customers. Because Office 365 frees the company from adding and maintaining new servers, UL has been able to complete its technology integrations very rapidly. Whether it’s a large acquisition in China or a small one in Australia, UL can now integrate new employees within a few weeks instead of several months.
“I didn’t have to staff up with a bunch of contractors or take project managers off other projects,” says Christian Anschuetz, the company’s chief information officer. “And that allowed us to take resources that would otherwise have been needed for our internal integration and focus them instead on growing the business to the benefit of customers. I can’t tell you how much that’s worth.”
At the same time, UL has been leveraging Office 365 to improve the way it works with customers, which demands intense collaboration with numerous stakeholders around the globe. By giving Office 365 to its clients, for example, UL has been able to work side-by-side with them over the Internet to resolve safety testing issues more quickly. To expand these technology offerings to more customers, Anschuetz plans to triple the number of SharePoint engineers. “Are there jobs there? Yes,” he says. “We need more resources to get this technology into the hands of our customers, which is to their benefit and delight.”
Moving to the Cloud
Of the 14 million new jobs that the cloud will generate between 2011 and 2015, a roughly equal number will accrue to large and small businesses, according to the IDC study.
Although small businesses make up the majority of employment in most parts of the world, they are generally less computerized. At the same time, IDC expects small- and medium-size businesses to adopt cloud services faster than large companies, many of which are constrained by existing legacy investments. “So when you put it all together, the two trends balance out, and you get a 50-50 split,” says John Gantz, senior vice president at IDC and author of the white paper.
The study found that the number of new jobs produced by cloud computing will be somewhat proportional to the size of each industry, but not entirely. In some industries, such as professional services and retail, the high percentage of small- and medium-size businesses will drive up adoption. In other sectors, such as banking, security issues will slow the move to the public cloud, but may increase adoption of private IT cloud services. Overall, three industries expected to generate the most cloud-related jobs are communications and media (2.4 million), banking (1.4 million), and discrete manufacturing (1.3 million).
The highest percentage of new jobs will occur in emerging markets, according to the study, especially China and India, which together are expected to produce nearly 6.8 million cloud-enabled jobs between 2011 and 2015. This can partly be attributed to the size of their workforces, and partly to the fact that many Chinese and Indian companies aren’t bound by large legacy system investments. “We tend to think of China and India as emerging markets, but they’re actually early adopters of the cloud,” Gantz says. “They’re not bound to existing systems. They’ve skipped that step, so there’s less holding them back.”
Nearly 1.2 million new cloud-related jobs will be created in the U.S. and Canada, according to the IDC study. An early adopter of cloud computing, the U.S. accounted for 62 percent of worldwide spending in public IT cloud services in 2011.
IDC developed its results by analyzing cloud spending trends in more than 40 countries and then using this information to forecast the number of jobs this spending will create.
“Enterprises that embrace cloud computing reduce the amount of IT time and budget devoted to legacy systems and routine upgrades, which then increases the time and budget they have for more innovative projects,” Gantz says. “When IT innovation happens, business innovation is reached, which then supports job creation.”
In a blog post about the study, Robert Youngjohns, president, Microsoft North America, calls the cloud “one of the most profound transformations in computing history.”
“Given the current difficult economic environment, every business is looking to empower their people, reduce costs, improve their customer connections, and create new opportunities through their technology investments,” he writes.
Hauser says Microsoft customers are using the cloud as an opportunity to re-examine their business models for working with customers, vendors, and other stakeholders. By moving to the cloud, for example, one auto sales parts customer has been able to source its parts faster and develop new inventory that will improve the customer experience. Likewise, a large pharmaceutical customer is leveraging the cloud to obtain feedback from think tanks around the world, which it then shares with customers to improve health care. “Again and again, we’re seeing how the cloud is helping our customers save costs and improve the customer experience,” she says.
Ultimately, the cloud will be an important force in helping to restore worldwide economic health, Hauser says. “The cloud is the No. 1 topic among CIOs from around the world,” she says. “They want to know how they can use it to fuel growth. And they want to be sure they have the right people and skills in place to make it happen.”