Will a Shift to Cloud Computing Create or Cut Jobs?

I don’t often look to movies about beer for poignant macroeconomic commentary, but as February ended with an 8.1 percent unemployment rate (and rising), a line from “Strange Brew” struck me as particularly relevant. As they’re introduced to their new jobs as the only two workers on the bottling line, the Mackenzie brothers are told: “Welcome to 1984, the age of automation and unemployment. The rise of the machine and the fall of man. The end of the human era.”

Will cloud computing, as some predict, be to information technology today what automation was to the assembly line in the ’80s? If so, what happens to those jobs? To the people who used to do them?

The Good News

The impact on the bottom line is impossible to deny. Cutting IT costs while maintaining, or even improving, performance levels saves jobs in other departments and might even help keep the company afloat. When done right, the savings realized from server consolidation are well documented, and they only improve when cloud-like levels of virtualization, automation and outsourcing come into play. The cold, hard truth is virtualization and cloud computing let IT departments do a lot more with a lot less.

But where jobs are lost in one area, they sprout up in others. Progressive companies might reinvest their IT savings in jobs that will help the business grow meaningfully, not just in terms of infrastructural complexity. As Werner Vogels says, cloud computing spurs innovation by eliminating the “undifferentiated heavy lifting.”

The increased business also creates jobs with companies providing cloud platforms, both public and private. You have to grow to keep up with demand, right? And let’s not forget the entirely new sectors enabled by cloud computing. There was no need for cloud-monitoring solutions or cloud-service management software before there was cloud computing. We had no idea how much we needed web applications like MySpace, Google Maps or Twitter before cloud computing techniques made them possible.

There is the law of conservation of matter, and there is the law of conservation of jobs.

The Bad News

Today’s laid-off systems administrators, however, are not likely landing these newly formed IT 2.0 jobs. They have been too busy applying duct tape and Band-Aids to existing infrastructures to stay on top of the cutting edge. Nearly a year and a half ago, already, I heard a FedEx Corporate Services IT executive bemoan how ill-equipped his team was to deal with the division’s increasingly fabric-like infrastructure. He was neither the first nor the last to express that sentiment.

Save for the folks who stay on to be trained in the new computing model, most of the application silo crowd seem destined to be seeking employment in new areas. Even as IT hiring ultimately picks up again to grow and evolve these next-generation data centers, it appears any new jobs will be for the young.

Cloud computing leaders have noticed the dearth of talent and have taken action. In late 2007, Google (s GOOG) and IBM (s IBM), followed by Yahoo, undertook initiatives to introduce web-scale computing to leading technology universities. Amazon (s AMZN) has its fingers in the pie, too. On top of simply giving researchers access to massive amounts of computing power and programming tools like MapReduce and Pig, engineers are actually teaching classes on web-scale development.

Across the board, university graduates are increasingly knowledgeable about Internet and cloud computing technologies. For some, it will be all they know. Once the Fortune 500 has cherry-picked the cream of the crop, the rest will be disbursed across the IT landscape.

The End Game

If cloud computing and virtualization really do affect IT departments like automation affected manufacturing plants 20-plus years ago, perhaps all we can do is hope for an economic recovery and for this decade’s version of the service industry (I’m hoping for clean energy) to create more jobs. Oh, and thank the existing IT staff for keeping the house of cards intact this long.