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Study: Cloudy Job Forecast Calls for Over a Half Million New IT Jobs

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Posted March 19, 2012 By Pedro Hernandez     Feedback

Mobile, social networks and Big Data to drive growth in cloud jobs and revenues.

The clouds will rain revenue and jobs over the next five years, according to an SAP-sponsored study (PDF) conducted by the Sand Hill Group. The study predicts the cloud will generate $20 billion in revenue per year and create over half a million jobs during this time period.

According to the research firm, IT job seekers can look forward to expanded career opportunities through 2017 thanks, in part, to the momentum set by 11 companies with significant cloud businesses in 2010. Citing evidence from the "Cloud Wars Part IV" report from Bank of America Merrill Lynch Global, Sand Hill says 11 cloud companies added 80,000 new jobs during 2010, representing a growth rate five times higher than that of the overall IT sector. The 11 high-growth companies are: Amazon, Concur, Google, Intuit, Netflix, NetSuite, OpenTable, RightNow, Salesforce, SuccessFactors and Taleo (since acquired by Oracle).

The cloud is also beginning to generate significant revenues for companies with more traditional IT software and services businesses. For instance, IBM derived $2.2 billion, or 14 percent, of its revenue from the cloud in 2010. For Microsoft, that figure was $ 1.95 billion, or 12 percent.

Their cloud ambitions -- plus those of other IT firms -- will generate 472,000 jobs worldwide during the next five years, according to the study. The venture capital community is expected to invest $30 billion during the same period, potentially adding 213,000 to that total.

While clouds are undeniably propelling IT job growth,  estimates surrounding growth rates vary among research outfits. For instance, a recent Microsoft-funded study from IDC predicts that by 2015 cloud computing will have created 14 million jobs and revenues  of $1.1 trillion.

Clouds Gather Around Big Data

Driving cloud growth is an explosion of mobile devices and social networks. Another contributing factor is companies that are investing heavily in IT to deal with so-called Big Data. IDC recently weighed in on the exploding Big Data market, forecasting  growth  from $3.2 billion in 2010 to $16.9 billion in 2015. However, that rosy forecast comes with a big asterisk. According to IDC, a lack of specialists that can help companies manage and analyze huge, unstructured stores of information may hamper the Big Data market.

Look to the clouds for help, says Sand Hill in its report: "Clearly, cloud infrastructure and platforms will play a huge role in accessing, processing, and analyzing such massive amounts of data. This is where cloud-based systems shine."

Also according to the Sandhill Group study, U.S. businesses can expect to save as much as $625 billion over five years by adopting cloud technologies. When it comes to IT employment, those savings could contribute to a virtuous circle. According to the report, "If companies were to completely reinvest their $125 billion cost savings for the next five years (that is, $625 billion) into new business opportunities, this could result in hundreds of thousands of new jobs."

Pedro Hernandez is a contributor to the IT Business Edge Network, the network for technology professionals. Previously, he served as a managing editor for the Internet.com network of IT-related websites and as the Green IT curator for GigaOM Pro. Follow him on Twitter @ecoINSITE.

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