Cloud computing could touch off global job boom

IDC anticipates 70,000 extra jobs in Canada, 6,000 in Vancouver, by 2015

Metro Vancouver is expected to gain 6,000 jobs by 2015 as part of a global trend toward adoption of cloud- based computing technology.

Cloud computing uses a network of remote servers on the Internet, rather than a local server, to manage, process and store data.

Research undertaken for Microsoft by International Data Corporation indicates that the cloud will support creation of 14 million jobs worldwide, including 70,000 in Canada within three years.

IDC foresees 20- per- cent annual job growth related to cloud services through 2015 in Vancouver. The technology consulting firm determined that at least 75 per cent of information technology ( IT) spending is consumed by maintenance of cash- eating legacy computing systems and “routine upgrades.”

IDC says businesses will shift from in- house systems to offsite, third- party systems to process, manage and store data — redirecting money to business growth and innovation. Transitioning out of IT could free up $ 1.1 trillion globally by 2015.

IDC reported worldwide spending of $ 28 billion on cloud services in 2011. Businesses using the cloud generated an additional $ 400 billion in revenue and 1.5 million new jobs.

This year , IDC projects cloud- based job gains of 6.7 million, led by communications and media, banking, and manufacturing.

IDC projects that by 2015 in Vancouver, small- and medium- sized businesses will add at least 2,900 new jobs as a result of cloud technology. Large- scale companies will add more than 3,000 new workers.

John Weigelt, national technology officer for Microsoft Canada, said in Vancouver that it’s a philosophical shift — and a financial one — as opposed to a technology issue.

The cost to start a company focusing on applications for smartphones and tablets ranges around $ 25,000, as opposed to $ 25 million or more a decade ago because there’s no need to invest heavily in computer servers or other infrastructure. Cloud systems like Microsoft’s Azure offer state- of- the- art computing power through the Internet at a fraction of the cost of an internal system.

“People starting businesses have these bright ideas and when they’re seeking funding, the people providing the funding are looking to fund those ideas. They don’t want to fund infrastructure, they don’t want to fund equipment and hardware,” Weigelt said.

David Maclaren, chief executive officer of Mediavalet, said the Vancouver company uses Azure to support its business providing digital storage services — such as photographs and videos — to the global hospitality and travel industries.

If Mediavalet was strictly serving the local market, Maclaren said, an in- house computing system would only account for 10 to 15 per cent of total start- up costs for a new business.

However, with more than 10,000 hotels, cruise ships and tourism bureaus around the world as clients, the company’s requirement for digital archives is vast — 30 terabytes by 2010 — and start- up costs for a global computing network would be three to five times greater than the setup cost for a local system. “It becomes pretty cost- prohibitive for a company to think about launching something regionally or globally because of just that infrastructure cost that you have to put up front, almost before you write a stitch of code,” Maclaren said.