The cloud threatens creative destruction for IT

a storm of creative destruction for IT

The winds of change are blowing through IT, and it’s not a gentle summer breeze. Earlier this month, Hewlett-Packard announced they were cutting 9,000 IT jobs. They’re consolidating their data centers and making them far more automated, as more advanced software and hardware eliminates the need for so many hands-on system and network administrators.

This isn’t a case of HP shutting down a business. They’re still going strong as a provider of IT infrastructure services to thousands of customers. Along with the 9,000 job cuts in IT operations, they also announced 6,000 new hires with customer-facing sales and delivery expertise. According to the Computerworld article, HP officials have repeatedly said that automation, not lower labor costs, are the key to increasing margins. This certainly isn’t a perspective that is unique to HP either.

Ironically, IT is becoming a victim of technological progress.

There have been two main bastions of IT value: infrastructure and applications. As demonstrated with HP, infrastructure jobs are being squeezed by consolidated service providers and ever more intelligent and automated offerings from the likes of Cisco, IBM, and Juniper Networks.

Meanwhile, the growing threat to IT-managed applications is cloud computing. Increasingly, pesky end-users with a credit card can now subscribe on-demand to just about any application they want, access it just about anywhere via their web browser, and never have to bother with IT red tape.


An article last month on ReadWriteWeb asked, Is IT Showing Insecurities in the Distrust of End Users? Discussing a CA report about IT’s views on cloud computing and security — in a nutshell, their views could be summed up as, “run! run for your lives! end-users messing with cloud applications will bring about the end of civilization! ayyyyyiee!” — writer Alex Williams commented, “Is it us or does IT seem a bit threatened by the overwhelming interest in cloud computing?”

Alex’s conclusion:

What’s really at risk is IT as we know it. The IT department is in danger of becoming irrelevant. And this trend will continue if the issue is always about the dangers of the cloud.

Instead, the focus should be on learning and trust. Cloud computing points to an era of sophisticated IT networks, managed by smart, open people. If such an intelligent environment is not fostered, then IT only has itself to blame if it becomes marginalized and relegated to a back room.

Meanwhile, the rest of the world seems to accept that moving to the cloud is inevitable. A recent report by the Pew Research Center on the future of cloud computing found that, among a broader set of technology stakeholders and critics, 71% agreed with the statement: “By 2020, most people won’t do their work with software running on a general-purpose PC. Instead, they will work in Internet-based applications such as Google Docs, and in applications run from smartphones.”

Nicholas Carr, author of Does IT Matter? and The Big Switch — two great books for people thinking strategically about the tectonic shifts underway in IT — commented:

We don’t have to wait until 2020 for this shift. It’s already happened. The browser (a cloud interface) is already by far the most possible PC application, and cloud services like Facebook are the most popular computing services, whether accessed via PCs, netbooks, or smartphones. For consumers, the cloud revolution has already happened.

If you work in IT, the handwriting is on the wall: the prospects of that career path are dwindling.

But where are all the tech jobs going?

“But how can that be?!” an IT professional might protest. Isn’t the world becoming more technologically driven, not less?

Yes, it is. But that technology is being delivered by outside providers, not the IT department. And most of them are not providing “IT services” per se, so much as they’re offering ready-to-consume end-user applications. These companies are growing like weeds, with new ones being launched every day. I’ve written recently about how the technology and economics of cloud computing have already created a perfect storm for marketing technology, but the same is happening throughout other areas of the organization as well.

Now, there will still be some IT jobs out there for a while. Certainly there are a lot of specialized and custom legacy applications installed out there that aren’t going away quickly. Many companies will still have some level of internal IT coordination and data management, even as their own IT infrastructure investments shift to more cost-effective cloud-based service providers.

And, hey, there will be jobs at those service providers. For instance, HP will still need IT experts on staff — but in highly optimized roles, with a much higher system-to-administrator ratio. To have one of those jobs, you’d better be one of the best of the best, and really up to speed with state-of-the-art IT automation technologies.

However, if you reposition your career — and your thinking — as a business technologist rather than an IT person, your future looks much brighter. There’s growing demand for software engineers and service delivery architects at all of these entrepreneurial cloud applications ventures. And, if you’re willing to embrace the art of wielding technology in a specific business domain — such as marketing, with the rise of the marketing technologist — you can turn all these cloud-based offerings into your toolbox rather than your competition.

There’s no way around it: we’re starting a decade of massive upheaval for IT. And, sorry, but almost everyone who doesn’t work in IT is thrilled about this. (As Mel Gibson cried in Braveheart, “FREEEEEEEEEDOM!!!”) But if you view this change as an opportunity for your skills and talents beyond the old definitions of IT, it can be a prosperous transformation for you too.

For better or worse, welcome to the storm of creative destruction.

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4 thoughts on “The cloud threatens creative destruction for IT”

  1. Scott…I ran and owned my own IT company up until October 2008. Call it foresight or jumping ship prematurely, anyways I saw the ease of access for a number of people to totally dump IT support for a number of reasons. My new firm works totally in the cloud and supports users in the cloud. You know something, it works and works without paying some $1000 a month support bill for a IT consultant to constantly update and upgrade parts of my network.
    Stuart R. Crawford
    ULISTIC Inc.

  2. Another great post. I was looking at this trend a few years ago and it worried me enough to get a MBA and ultimately move to Marketing. Indeed there will still be plenty of jobs in the future, but the deck is being reshuffled. More and more of the technical jobs will move out of the corporation and into the IT/BPO services companies. IT positions within corporations will change; they will look a lot more like procurement/vendor relationship managers and less like technicians.

  3. Scott… You couldn’t be more spot on with this article – and your comment about the need for IT people to start thinking and acting as Business Technologists can not be over stated. As our firm helps business people look at ways to transition IT systems to the cloud, we frequently talk with IT people that feel threatened about the impact on their jobs that this is a liberating event – one that will liberate them to add more value to their own organization – or sadly, one that will liberate them to look for a new job.
    Pete Zarras
    CloudStrategies LLC.

  4. The issue is not the cloud. The issue is the number of “IT” folks who are fat cats sitting on their knowledge or lack of knowledge of others and using it for an easy job.
    IT was designed to improve a business through efficiency. Most internal IT depts have turned into a team of knowledge hoarders who feel their job is secure if they just do enough to keep the lights on.
    But the cloud is not going to be the answer to everything. The ultimate solution will be a hybrid role where companies remove the excess resources they have been using for simple IT roles and keep the talent and turn their IT depts back into an asset.

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