Report Cites Megatrends Mobile, Social and Big Data to Propel the Growth of Cloud Services
Cloud computing is a powerful catalyst for job creation and has greater potential for employment growth than the Internet did in its early years, according to a new study by the Sand Hill Group, sponsored by SAP America, Inc., a subsidiary of SAP AG (NYSE: SAP).
At a briefing Wednesday morning in Washington, DC, the study’s authors said cloud computing is already generating a sizable number of jobs in the U.S. today. Based on numerous trends and indicators, it has the future potential to create very large business opportunities and hundreds of thousands of new jobs in the U.S. The study, titled “Job Growth in the Forecast: How Cloud Computing is Generating New Business Opportunities and Fueling Job Growth in the United States,” looked at several ways cloud computing may create jobs and found specifically:
- Eleven cloud computing companies added 80,000 jobs in the United States in 2010, and the employment growth rate at these organizations was almost five times than that of the high-tech sector overall.
- Companies selling cloud services are projected to grow revenues by an average of US$20 billion per year for the next five years, which has the potential to generate as many as 472,000 jobs in the U.S. and abroad in the next five years.
- Venture capital investments in cloud opportunities are projected to be US$30 billion in the next five years, which could add another 213,000 new jobs in the U.S.
- The economic impact for companies buying cloud services can be even more significant. Cloud computing could save U.S. businesses as much as US$625 billion over five years, much of which could be reinvested to create new business opportunities and additional jobs.
The study says three industry megatrends are propelling the growth of cloud services and employment: the boom in mobile computing devices such as smartphones and tablets; the “social” trend in online services; and the growth of “Big Data” flows that require more data management services. Government policies and purchasing decisions at all levels will also have a major influence on cloud adoption and job growth.
“The study confirms that cloud computing can have a significant impact at every key growth stage of the business lifecycle – from launching a startup to expanding a business to managing a multi-national enterprise,” said Jacqueline Vanacek, vice president and cloud computing evangelist at SAP. “Business growth leads to jobs, and cloud computing will accelerate this in certain industries.”
“These results support what many in the cloud community have long suspected,” said M.R. Rangaswami, study author and co-founder of Sand Hill Group, a strategic advisory firm known for its insight into the software and services market. “The impending growth of mobile computing, social networking and data management all have one thing in common — the cloud — which is why job growth in this area cannot be ignored.”
As the market leader in enterprise application software, SAP has a growing portfolio of cloud offerings, including line-of-business on-demand solutions for sales, travel and sourcing, along with a cloud suite and applications for collaboration and analytics. The company recently announced it will realign its income statement to list cloud-related revenues as a separate line item, and its recently completed acquisition of SuccessFactors will give SAP the most comprehensive, cloud-based human capital management solutions in the market. SAP plans to create several hundred new cloud-related sales and consulting positions globally in the next 12 to 18 months.
For more information, read the full report: “Job Growth in the Forecast: How Cloud Computing is Generating New Business Opportunities and Fueling Job Growth in the United States” [PDF] and visit the SAP Newsroom.
About Sand Hill Group
Sand Hill Group (http://sandhill.com) provides strategic management, investment, and marketing services to emerging market leaders. Sand Hill Group is best known for its work in the $600-billion software and services market. As founder of the “Enterprise” and “Software” conference series, Sand Hill Group has been credited with uniting the software business ecosystem of executives, entrepreneurs, investors, and professionals. The firm is also the publisher of SandHill.com, the premier online destination for business strategies for the software, cloud, and mobile ecosystem. The site and its newsletters are read by thousands of top software industry executives as well as CIOs and IT buyer executives. Sand Hill Group also funds primary research into key technology and business model trends that impact business in the software, cloud, and mobile ecosystem.