Anytime a radical technology comes along, radical changes in business and work follow. For instance, the growth of Google, eBay, and Amazon directly piggybacked on the mainstreaming of the Internet. Similarly, in the pre-Internet years, people didn’t spend their entire days tethered to PCs.
What shifts in business and work will result from the growth of cloud computing? Is the cloud an incremental change that will only translate to small differences, or is the cloud radical enough to usher in wholesale changes?
It’s too early to say for certain. However, here are five ways the cloud is already changing business and work.
1. Those with IT jobs should start worrying . . . now.
If you’re in IT and you have a pulse, you’re already worried. IT vendors have slashed approximately 215,000 jobs since the beginning of 2009, according to the TechAmerica Foundation.
Fortunately, the TechAmerica Foundation believes that the worst of the economic downturn is over, noting that tech companies added 30,200 IT jobs in the first half of 2010.
Recovery or not, certain types of IT jobs will almost certainly disappear. If your email is in the cloud, for instance, you don’t need to keep an IT worker on staff whose sole task is keeping Exchange up and running. At the same time, IT automation and cloud computing are displacing low-level mundane IT jobs.
As Chris Weitz, Director of Deloitte Consulting, pointed out, over the past couple of decades, the trend in IT has also been for employees to specialize into niches. “You’re a Unix guy or a database administrator or a system administrator,” he said “That level of specialization is already fading away. The changing nature of IT demands a broader skill set.”
The quarterly IT Hiring Index and Skills Reportfrom Robert Half Technology found that the IT skills most in demand right now are networking, information security and help desk/technical support.
Those skills, though, are ones that many organizations will outsource, if they haven’t already. According to Mark Popolano, former CIO at AIG and currently a Senior Advisor at Ineum Consulting, within five years, the typical CIO will only own about 25 percent of his or her IT workforce. The rest will be outsourced.
Obviously, this means that one important skill that you can acquire to protect your existing IT job is vendor management.
2. Knowledge workers say goodbye to the cubicle.
If you’ve read any of my previous cloud computing articles, you’ll know that I believe that one of the cloud’s biggest benefits will be boosting the capabilities of constrained devices. A smartphone that can access a range of applications via the cloud becomes a mini-PC.
For security pros, these mini-PCs are a boon, much better than laptops and even netbooks. “The key from a security standpoint is that cloud-based applications are accessed through the browser,” said Rajen Sheth, group product manager for Google Apps. “Smartphones don’t store data locally, so if employees lose them, they’re not putting sensitive information at risk.”
IT will be able to shake off concerns about data privacy, but they’ll need solid identity management solutions in place. Once they do, workers will no longer be compelled to sit in the office in order to access key data and applications. Telecommuting, virtual offices and mobility will all trend upward on the cloud.
3. Social networking becomes business critical.
It’s not only IT workers who must cope with social media, but pretty much every knowledge worker. LinkedIn, Facebook and Twitter are all standard marketing and business-development tools.
Of course, plenty of managers worry that social networking is draining productivity. Actually, the opposite is true, according to Shail Khiyara, Senior Vice President and Chief Marketing Officer of Taleo, a provider of on-demand talent management solutions.
“One of our customers found that social networking greatly boosted productivity throughout the company,” he said. “What happens is that social networking strengthens your ecosystem. We’ve seen this ourselves. We make social networking a key part of our own ecosystem. As a result, we’ve learned tons about what really matters to our customers.”
The cloud puts greater emphasis on the ecosystem. Gone are the days of the end-to-end provider, where you get everything from a Microsoft or IBM. Today’s cloud-born companies find one solution to offer and do it well, such as CRM, talent management or cloud infrastructure, and they encourage their customers to build around those platforms.
What Taleo is doing is cutting edge. I’ve discussed cloud ecosystems with all of the big players, and Taleo is the first one to emphasize the ecosystem as a social networking tool.
They won’t be the last.
4. Tech adoption spreads to the masses, and the masses much become tech savvy to compete.
The cloud has a democratizing effect. Technologies that were previously packaged as expensive on-premise solutions, and which only large enterprises could afford, are now available as on-demand, pay-as-you-go solutions that even SMBs can adopt.
An SMB can access and afford an array of solutions that would make the CIO of a Fortune 500 company, circa 2000, green with envy.
“The flip side is that even small companies must be tech savvy,” Sheth of Google said. “Even the local flower shop must have a web presence.” Actually, pretty much every business must have its own website, or risk losing customers.
Certain verticals demand an even higher degree of tech engagement. Consider restaurants. It used to be that you learned about good restaurants through newspaper reviews or word of mouth. Today, word of mouth is synonymous with Yelp. If you have lousy Yelp ratings, you’re in trouble. Many restaurant managers actively engage the Yelp community to keep their ratings up.
Meanwhile, if business dips, a coupon in the local newspaper will go unread. Instead, they must launch and manage things like Grouponcampaigns.
In other words, cloud computing is making pretty much every worker a knowledge worker.
5. The cloud threatens incumbents.
The cloud removes many of the barriers to entry for technology startups. You no longer need a heavy infrastructure investment. You no longer need lengthy development cycles. You no longer need to invest in expensive devices and software.
Instead, you can sign up for Amazon Web Services or Google Appsfor your infrastructure and development. You can link legacy computing devices to the cloud to save on hardware purchases. You can pay for the software you need on the go, and whatever projects you can’t handle in-house, you can outsource cheaply.
Today’s bootstrap startup makes startups of the dotcom era look absolutely bloated.
Many startups aren’t even investing in office space in the early stages. Why bother when your co-founders and early employees would rather work from home anyway? With the cloud, that’s not just possible but often an advantage.
“The analogy I like to use is climate change,” said Weitz of Deloitte. “As the climate changes, different breeds of animal prosper. Others go extinct. Over the last couple of years, we have seen established players realize they have to evolve. They’ve gone through the classic stages of denial, recognition and acknowledgement.”
Today, every tech vendor has a cloud plan. You couldn’t say that even a year ago.
Each tech revolution brings with it new behemoths, while old ones fade. IBM never recaptured the dominance it had in the mainframe days. Microsoft has lost ground to Google, which, in turn, is being pressed by Facebook.
True, many incumbents find their footing and do just fine. IBM is still a bona fide giant. Microsoft won’t go away any time soon. Yet, behemoths like Microsoft and IBM will find that they no longer have the power they once had. Because they have to maintain and support legacy products, much of their attention is focused not on innovation but instead on the status quo.
Compare that to Google, which to a certain degree has been a cloud player all along. Google is still only a fledgling player in the enterprise, but it looks to be much better positioned going forward than the likes of Microsoft, IBM or HP because it doesn’t have nearly as much baggage.
Google also had the foresight to institutionalize innovation. Google’s 20-percent time means that developers will try out all sorts of wild science experiments, such as self-driving cars.
In an era where startups can be successful in a few months rather than a few years, expect ongoing innovation to be one of the most important traits that the new breed of tech animal must possess in order to succeed.