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Cloud Computing

Are the Jobs Lost from HP a Harbinger of Widespread IT Job Losses Due to the Greater Automation of Cloud?

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Phil Wainewright: Are the 9000 jobs lost from HP as it shifts its data centers to cloud computing a harbinger of widespread IT job losses due to the greater automation that cloud allows?

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  • Yes, the transformation of manual to automated work is one of the many impacts that increased productivity brings to a business. Human beings, by our nature, are highly none repetitive, despite our daily rituals. We do not perform well when it comes to doing the same thing over, and over, and over again.

    Computing systems, and by it extension the Cloud, represent all the things that we humans are not. They designed to be task-oriented, highly-structured, time-sensitive, and overtly-repetitive. Translated - the are highly efficient work machines capable of doing the things it does more efficient, not necessarily more effectively, than humans.

    In the end, this means that less effort will be needed for those activities in the cloud space than in a human sphere. It is a simple law of productivity, one that we should understand and get use to. If you are concern about the loss of jobs to the cloud, as most of us are, then we can get some solace in knowing that there will always be activities more suited to humans than computers. Thus, most likely they will not elevate into the ether none as Cloud Computing.

  • This question has a BIG assumption built into it - that all 9000 people laid off worked in HP data centers watching consoles, loading tapes, running/scheduling batch jobs, etc.

    It is simply NOT true.

    For example, HP has at a single stroke halved their R&D people based in Bristol, UK on Thursday. HP has slashed its five remaining laboratories in Bristol (HP Labs) to two as well as closing all of its Japanese research.

    Another example, HP is cutting 5,700 jobs in Europe with some 700 to go in the UK, with the primary focus on its manufacturing plant in Scotland where products have become increasingly commoditised and the sites are under-used. Given the current economic climate and continued pressure on costs it seems reasonable that manufacturing work is going to the Czech Republic.

    The above examples of jobs lost (R&D and manufacturing) have nothing to do with Cloud Computing. It's just good, old fashioned business.

  • I tend to agree with Tarak. But I can't resist the opportunity to highlight again the impact of Cloud Computing on IT vendors' revenue, and in particular infrastructure and middleware vendors. The Cloud prompts a different business model for IT - actually Hardware as well as Software - and an inevitable reduction in "revenue per SKU".

    In my recent blog post on this topic (How to survive the dark side of Cloud Computing) I expect indeed significant cost cuts by vendors. I think that we're not there yet, but brace for serious cuts as Cloud increases its penetration.

  • Here is my view on the Cloud and jobs:
    But I am not sure that HP jobs have been lost because of the Cloud since they are also providing Cloud and outsourcing services. I am not sure what HP business models are these days.

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