Cloud adoption will effect a change in the ICT industry
Some jobs will disappear; new ones will be created
RUMOR has it that when the CEO of a US-based technology multinational had an open “town hall” dialogue with the employees of its Malaysian subsidiary a couple of years ago, one of them asked if, given cloud computing’s increasing traction in the IT world, he would still have a job two years down the road.
The CEO pointed out that the cloud transition was real and happening now, but that the company would be rolling out training and reskilling programs to help employees find new roles.
“But you’re saying that my job, the job I have now, is going to disappear? What if I don’t want a new role?” said the insistent employee.
“My friend, if you don’t want to learn new things, you picked the wrong industry to work in,” said the CEO.
The Information Technology (IT) industry is no stranger to paradigm-shifting changes. The white-coated overlords of the mainframe computers had to give way to executives in short-sleeved shirts moving minicomputers around, to the t-shirted geeks plumping down an entire computer onto your desk. The Internet, Web 2.0 and such developments have completely redefined the place IT has in a business.
The cloud means some companies – indeed entire industries – will have no need to maintain their own data centers. Some won’t even need IT departments any longer. And let’s face it, IT has had an interesting history of making some jobs obsolete.
At the Gartner Symposium in Orlando, Florida last October, the analyst firm declared that “the long-run value proposition of IT is not to support the human workforce – it is to replace it,” according to this ZDnet report.
“In other words, any job loss related to offshore outsourcing may look like a walk in the park once cloud computing gets rolling,” ZDnet added.
It’s a gloomy scenario that Ananth Lazarus, managing director of Microsoft Malaysia, is not buying. “A common misperception is that cloud computing is a job eliminator, but in truth it will be a job creator — a major one.”
[Disclosure: The writer is a former employee of Microsoft Malaysia]
Citing a new study by the analyst firm IDC, Ananth (pic) says in an email statement that spending on public and private IT cloud services will generate nearly 14 million jobs worldwide from 2011 to 2015.
The research, commissioned by Microsoft, also found that IT innovation created by cloud computing could produce RM3.34 trillion (US$1.1 trillion) a year in new business revenues, he adds.
“The study also showed that, 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.
“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,” he adds.
The small and medium factor may be even more critical in Malaysia, where small and medium enterprises (SMEs) are estimated to comprise 99% of total businesses, providing 56% of the employment and ultimately contributing 31% to the Gross Domestic Product (GDP) and 19% of exports.
The 10th Malaysia Plan (2011-2015) recognizes this, with a strong emphasis on developing the small business ecosystem, including through the adoption of technology to improve their efficiency and competitiveness.
Technology adoption has always been a bit of an obstacle with the SME segment, but many IT industry pundits believe that the cloud may prove the turning point, allowing them to adopt technology at a much lower cost, and in some areas, without the need for dedicated IT staff.
According to Ananth, IDC’s study further found that the number of new jobs produced by cloud computing will be somewhat proportional to the size of each industry, though 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 the adoption of private IT cloud services.
“The highest percentage of new jobs will occur in emerging markets,” he says.
“For Malaysia, the growth of the total workforce is expected to be 9% from the beginning of 2012 to the end of 2015, while cloud-generated jobs during the same period are expected to grow by a factor of more than three times that amount, at 30.2%,” he adds.
The double-digit growth outlook is the same throughout the region, according to IDC: Indonesia (+29.2%), Philippines (+30.8%), Singapore (+30.6%), Korea (+27.7%), or Japan (+39.7%).
“Given these findings, it is clear that the cloud is going to have a huge impact on job creation – and more importantly, in creating new ways of working.
“The question, then, for Malaysian IT graduates and IT educators is this: Are we ready to face the new realities of an IT industry powered by cloud computing?”
It’s important for ICT graduates to be prepared for this transformation – IT professionals of the near-future can’t be isolated and aloof technologists but have to be masters at harnessing and optimizing technology to meet their organizations’ business objectives.
“To do this, IT graduates will not do themselves any favors merely by understanding the latest and greatest technologies alone. They must also be trained to have a business-centric mindset – understanding what their particular organization’s business objectives are and how the organization is going about to achieve it,” says Ananth.
“For example, they must be able to map out how IT can make marketing track results better, or how sales can become more efficient, or even how an organization can become more personal in its approach to customer service,” he says.
Furthermore, as organizations offload some IT functions to the cloud, their IT staff will be freed up to work on more innovative projects. The creative IT professional will be an even more valued member of the team, while the business-as-usual coder is going to be redundant.
“This is where educators need increase their commitment in providing the resources, time and space to incubate IT innovation among students – perhaps even as early as primary school,” says Ananth.
To many of today’s younger generations, technology is more than just a tool, it is a way of life, he notes.
“Thus, IT education cannot be just about preparing students for examinations, with the proverbial ‘paper chase’ as its end-goal. Adequate time and space must be allocated to incubate creativity and innovation powered by technology.
“Educators must shift from teaching about how to better use technology to looking at solving big, real-world problems through technology,” he adds.
A serious dichotomy
Glut of ICT grads, glut of jobs (Premium)
MNCs weigh in
Views from the ground