Cloud as job creator or destroyer? Microsoft says the former

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A new Microsoft-funded IDC report purports to show that the adoption of cloud computing will spark the creation of 8.8 million new jobs worldwide (1.1 million in the U.S.) in the next four years. That stat was met with silence from Microsoft partners and IT people who feel the number is exaggerated at best, and misleading at worst. After all, one of the biggest selling points of cloud computing is that it cuts IT costs, including those associated with personnel.

It’s easy to see why Microsoft would tout these numbers. Of all the IT companies moving to cloud computing, Microsoft has the largest array of partners and users given its Windows and Office franchises. Many of those partners have already been dinged by the move to cloud-delivered software and services. After all, those services are typically (although not always) delivered directly from the vendor to customer, disintermediating the value-added resellers (VARs) and other partners that once acted as a conduit.

To avoid alienating this base, it’s helpful for Microsoft to paint cloud computing as a job creator. But some IT pros just aren’t buying these new numbers and see cloud computing, in general, as a job killer. Others said there may be some job creation but most of those jobs will flow out of the U.S. to lower-cost labor markets.

So, where are these jobs anyway?

“Cloud computing may mean jobs for people who build data centers. But inside the data centers, it consolidates jobs,” said the CEO of one long-time Microsoft partner in the mid-Atlantic region who requested anonymity.

Others agreed. “Where are these jobs? I don’t see them. Are they moving abroad?” said a another Microsoft partner who is not authorized to speak to the press.

Some verticals, geographies benefit more than others

IDC lists estimated cloud-generated jobs by vertical industry — banking, manufacturing, education, etc. The biggest growth will come in “communications and media,” which will see new 2.4 million jobs by 2015, accounting for a healthy 31.6 compound annual growth rate from 2012 to 2015.

It does not segment jobs by function within those verticals, however, so it doesn’t attempt to estimate how many jobs will be in IT management. Since the jobs created will result from increased business revenue “we assume they match the industry mix by job function — marketing, sales, finance and administration, production, service, and so on,” according to the report.

IDC included private cloud adoption in these numbers where in the past it focused on public cloud only. Based on its calculations, most of the new jobs will accrue to emerging markets like China and India because of their huge, presumably inexpensive, workforces.

It doesn’t help matters that, in the past, Microsoft has said different things about cloud computing’s impact to different audiences. In a Microsoft-funded Harvard Business Review white paper published last June, for example, here’s what it said about systems integrators’ roles going forward:

“Trying to operate in the old way — for example, hiring a large integrator to run your implementation — misses the point (and the cost benefits) of cloud, experienced users believe. One company was quoted $20 million to move to a software-as-a-service solution for HR because they had brought in a third party to do it for them, when another very large company had done the whole thing for less than a quarter of that. ‘A lot of people just don’t get it yet.’”

It is not hard to believe that more efficient computing will open up jobs for people who retrain themselves. IDC’s point is that cloud computing opens up more IT innovation, which leads to more revenue which leads to job creation. But given what we’ve seen from public companies sitting on their cash troves while continuing to lay off workers, that seems a stretch.

Another factor: The three-year recession appears to be easing up so one can hope that there’s will be a corresponding growth spurt in jobs as the economy recovers. But to me, it’s unclear how much of that growth can be attributed to cloud computing.


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