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Microsoft: Cloud Computing Equals 12,500 Detroit Jobs

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REDMOND, Wash. — Spending on public and private IT cloud services will generate nearly 14 million jobs worldwide from 2011 to 2015, according to a new study by the analyst firm IDC.

The research, commissioned by Microsoft, also found that IT innovation created by cloud computing could produce $1.1 trillion a year in new business revenue.

The study predicted that 12,500 of those jobs will be in the Detroit region.

The study said, however, that jobs created by cloud computing in Detroit will be a smaller share of the United States total than the region’s work force is of the total U.S. work force. The study said that’s because there are more jobs in retail and utilities and fewer in professional and financial services in Detroit by percentage than the nation as a whole — and professional and financial services will see the most job growth from the cloud.

“The cloud is going to have a huge impact on job creation,” says Susan Hauser, Microsoft corporate vice president of the Worldwide Enterprise and Partner Group. “It’s a transformative technology that will drive down costs, spur innovation, and open up new jobs and skillsets across the globe.”

One way in which the cloud is helping companies to be more innovative is by freeing up IT managers to work on more mission-critical projects. In addition, many businesses are using the cloud to improve how they work with customers and partners.

The study predicts that by 2015, business revenues from IT innovation enabled by the cloud could reach $1.1 trillion a year.

More than one-third of cloud-enabled jobs will occur in the communications and media, banking, and discrete manufacturing industries, the study says. Also, China and India will account for about half of all new cloud-related jobs.

While cloud computing is still just emerging as a computing style — IDC estimates that spending on public cloud IT services in 2011 was $28 billion, compared with more than $1.7 trillion in spending on total IT products and services — it already has begun changing how IT delivers economic value to countries, cities, industries, and small businesses. This is because cloud computing comes with unique economic leverage that means a little money spent up front leads to impressive returns down the line.

IDC estimates that last year alone, IT cloud services helped organizations of all sizes and all vertical sectors around the world generate more than $400 billion in revenue and 1.5 million new jobs. In the next four years, the number of new jobs will surpass 8.8 million.

Although small businesses make up the majority of employment in most parts of the world, they are generally less computerized. At the same time, IDC expects small- and medium-size businesses to adopt cloud services faster than large companies, many of which are constrained by existing legacy investments. “So when you put it all together, the two trends balance out, and you get a 50-50 split,” says John Gantz, senior vice president at IDC and author of the white paper.

The study found that the number of new jobs produced by cloud computing won’t be exactly proportional to the size of each industry. In some industries, such as professional services and retail, the high percentage of small- and medium-size businesses will drive up adoption. In other sectors, such as banking, security issues will slow the move to the public cloud, but may increase adoption of private IT cloud services. Overall, three industries expected to generate the most cloud-related jobs are communications and media (2.4 million), banking (1.4 million), and discrete manufacturing (1.3 million).

The highest percentage of new jobs will occur in emerging markets, according to the study, especially China and India, which together are expected to produce nearly 6.8 million cloud-enabled jobs between 2011 and 2015. This can partly be attributed to the size of their workforces, and partly to the fact that many Chinese and Indian companies aren’t bound by large legacy system investments.

“We tend to think of China and India as emerging markets, but they’re actually early adopters of the cloud,” Gantz says. “They’re not bound to existing systems. They’ve skipped that step, so there’s less holding them back.”

IDC developed its results by analyzing cloud spending trends in more than 40 countries and then using this information to forecast the number of jobs this spending will create.

“Enterprises that embrace cloud computing reduce the amount of IT time and budget devoted to legacy systems and routine upgrades, which then increases the time and budget they have for more innovative projects,” Gantz says. “When IT innovation happens, business innovation is reached, which then supports job creation.”

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