The IT industry is about to go through a metamorphosis in the coming decade, and technicians and engineers need to be prepared. Research is showing a 75% reduction in the work force needed in the next decade, and a 50% reduction in the next five years for the traditional company IT staff. This will occur at all levels, and the numbers presented will bear this out.
Despite the recession, IT staffing added 40,000 jobs during the worst quarter of the recession in 2009. It is expected to continue to grow in the short term. So, how do we get from a growth industry to one where massive amounts of people will be out of work?
Much thought was put into whether or not to write this article. I know it will bring criticism and spur debate, but that’s acceptable and encouraged. And it’s not all dire. The staffing levels that will be discussed are for traditional IT staff, i.e. IT administrators, systems administrators, help desk, and computer repair technicians. There is also a strong case for growth where these staff can migrate as the industry goes through this change.
In technology, change is not only inevitable, but it is the lifeblood of the industry. If nothing changed in computer technology, we wouldn’t see a need to ever upgrade and buy new technology. That would eventually kill off any industry. Our industry would be especially vulnerable.
What is the driving force for this change? Cloud computing is the main instigator. Cloud computing has been around for well over a decade, but several things have kept it from coming to fruition and being fully accepted by corporate America. The first problem is that we have been ranked as one of the slowest adopters of high speed technology in the world. In 2009, America was ranked 28th according to an article in the Chicago Tribune. With a lack of speed such as this, the cloud was just too slow to be useful.
There is a high percentage of companies that don’t qualify for any other technology than T1’s that run hundreds of dollars a month for a meager 1.5 Mbs. Home users have faster, cheaper access to internet speed than businesses. Although there are lots of conspiracy theories about the internet service providers keeping the speed slow for companies because they can afford it, the fact is that companies are spread out over large buildings, and homes are typically much closer together. It’s simple economics to the ISPs that they can get to more homes with cheaper broadband than they can to sprawling businesses.
This has slowly changed in the past, but is going to pick up steam very quickly. President Obama has earmarked $8 billion dollars to upgrade the information super highway in America to be on par with the fastest of countries, such as South Korea.
Now that the first of several stumbling blocks will shortly be removed, computing giants such as Microsoft and Google will fill in the next gap. Applications in the cloud are needed to have a home for all of our corporate data to be housed. Smaller companies with questionable financial security are being gobbled up by the tech giants and given legitimacy. Until that started to happen, Cloud Computing had one bloody nose after another because some corporations, eager to be on the cutting edge, put their trust in the Cloud too soon. Many had their data disappear when those smaller companies closed the doors and took their data with them when times got tough.
It is generally accepted that Google and Microsoft will be around for some time to come, and other companies such as IBM, Novell, HP, Dell, Cisco and VMWare all have their eyes on the Clouds.
I have been both an IT administrator and a computer consultant for many years. In the past 24 months, we have seen more than 50% reduction in small server sales for startup companies. Prior to that time, it was a given that any small business startup would buy a server package of roughly $5,000 to get started. On top of that, they would need laptops or desktops, networking, security and internet access.
Startups are now using Salesforce.com for their CRM, hosted services for their email and smart phones, and online storage that syncs to multiple locations for their data. Applications to run businesses are going totally online instead of requiring an onsite server. This is referred to as Software as a Service (SaaS) and Gartner expects this industry to grow by 27% this year and to double by 2012.
By these numbers alone, this means that the average server room will shrink its server count by at least half in just three years. Application servers can make up the majority of server room equipment in a large company, but there will still be a need for Directory services servers, at least initially.
What about other expensive IT staff in large companies? The most expensive salary by far is the Network Architect (NA). This position is the top of the technology heap. The NA averages over $100K according to glassdoor.com, and can sometimes make much more at top companies. The NA’s job is to connect all branches of a company’s infrastructure together. This is a highly complex job and they do earn their money. Their corporate network jobs will be almost completely obsolete in ten years and here’s why. Right now, we need all internal offices to connect in either a hub and spoke to the main office, or in a mesh for more paranoid and data intense companies. If these companies suddenly connect to a single Cloud, there will be no need for complex routing. Security will still be needed, but communications security experts will see a drop in their positions as companies safely and easily encrypt all of their traffic to the Cloud.
As long as the company is using an industry standard encryption such as AES, and no inbound traffic is needed because it goes to the Cloud, then they are left protecting internal traffic only. With more than half of a company’s servers gone and complex routing eliminated, a conservative drop in server and network level staff will be 50% when a company decides to go this route. Common sense would dictate that percentage drop will be even higher in ten years.
So, what about that internal support? How many technicians does it take to service people internally? Much research and speculation has been done about how many IT staff are needed per company based on the numbers of employees to support. This is an impossible task because every company has different requirements. My years of experience came in handy with this dilemma, and my estimate is 1 IT staff to 40 employees.
If we take these numbers and find out how this staff is spending their time, we see where the entire industry’s wheels come completely off. A company help desk technician spends almost all of their time helping customers with computer desktop or laptop issues. A level one or two technician typically spends their time repairing computers, removing and protecting against malware, and re-imaging computers with corrupt operating systems or for new staff rollout. Application upgrades and patching are also part of the job.
So where will this portion of the industry see the greatest change? That would have to be with thin clients. They cost about half of a new fat client, aka traditional PC. They are almost completely invulnerable to malware because they are primarily used to connect to a terminal server of some flavor, i.e. Windows Terminal Server or Citrix. According to WYSE.com, the current growth rate is about 18% per year. That will replace most fat clients within ten years if the rate holds steady. There are some in the industry that say the rate will accelerate as companies realize they no longer have to protect their data against deadly malware threats when using thin clients. That cost went over $30 billion in 2007 according to networksecurityjournal.com, and has steadily grown since then.
That would be reason alone to switch to thin clients, but when you also add in the benefit of not having to ever repair a thin client, you also take away the cost of the IT staff you employ to take care of them. There is no software configuration to load, update, or troubleshoot. When they break they can be thrown away and replaced in minutes instead of hours. The average PC takes over four hours to prepare for new staff. The average thin client takes 120 seconds. Now we see a complete picture of where the industry is going. What about laptops? They have thin clients for laptops as well. Road warriors can take these anywhere there is internet access and log into the terminal server to do the same thing an in- house staff would do. The added bonus is that if the thin client laptop is stolen, they have no data to steal. They cost around $400, so they can be replaced cheaper than they can be fixed.
HIPAA and SOX regulators embrace this type of security, and companies will run to buy them once SaaS and speed issues are up to the standards businesses will require. I estimate the ratio of IT staff will drop from 1:40 to 1:200 in the next decade.
It was mentioned at the beginning of this article that it’s not all bad news, and here is where the sun comes back on this cloudy day. The IT industry isn’t going away. It’s just changing. If you can change with it then there isn’t any reason why you can’t prosper during this migration.
The most obvious area of growth will be in data center personnel. Since the Cloud basically lives in the data center, it would make sense that as it grows, so should the staff needed to support it. These will be good, high paying jobs that require an education and certification to do well. Server and network administrators will find lots of work here.
Software programmers and engineers shouldn’t see anything but growth since the Cloud doesn’t seem to care where the software designers do their work. Web designers will also continue to be in high demand. A hybrid position of web designer and database programmer will see a significant growth. It’s a rare skill to have a good web designer who understands how databases hook into the website.
Another interesting development will be with internet IP addressing. I have interviewed the folks from the American Registry of Information Numbers (ARIN) on a couple of occasions on our All Tech Radio Show. They said that by 2011, ARIN will run out of large IP blocks in TCPIP v.4, and they will have no choice but to start charging extra for using the limited v.4 addresses. This will force ISPs to charge the customer more until customers relent and use v.6 addresses.
This will cause growth in an entirely new area, and that is home networking. The home user may not move exclusively to the Cloud for most of their work anytime soon. Unlike businesses, the home user doesn’t save a lot of money to do so. Cloud services such as email and data and picture storage will continue to rise in popularity, but moving to a thin client may not be an attractive medium for them.
However, by moving to v.6, it will cause the inevitable rise of home appliances to be wirelessly networked. These internet bound appliances such as refrigerators, toasters, and washing machines, can send real time data to service companies for them to remotely diagnose and repair issues while talking to them on the phone. TV’s have already made the jump to being networked. Game consoles have been doing it for years. By moving from billions of IP addresses to trillions, there is no reason not to move towards this new technology, especially with the wireless spectrums now available due to the FCC sale.
Local wireless access points won’t be needed to the same degree they are now because the wireless waves will have no problem gaining internal access through walls and other obstructions unlike 802.11. All data will be encrypted, thus eventually eliminating the need for most external firewalls. The appliances will have firewalls built in similar to software firewalls in Windows and other desktop operating systems. TCPIP v.6 already has security built into it, unlike v.4. That will assist even further in moving this direction.
All these devices on the internet will need service by IT staff. Personal computers will be a small part of our work as tablets, gaming consoles, kitchen appliances, and a host of other devices will need to be networked.
Don’t fear the future. The possibilities are endless, and the future is about to take a radical change. Smart technicians and engineers will start planning now by getting up to speed on their education to prepare for the drop in IT staffing needs in traditional corporate America.
Robert McMillen, President of All Tech 1 Computer Consulting Services, host of the All Tech Radio Show, and author of “How to be an IT Administrator.”
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