More Cloud, Fewer JobsMore Cloud, Fewer Jobs

The number of local data center workers is small compared to the previous local employment levels.

Cloud, cloud, cloud, we can't escape the term. Creating cloud data centers may reduce the enterprise's cost. But it appears the cloud will not create many jobs for those in need of work. As enterprises move to the cloud, they will necessarily reduce their staff. In reality, the IT industry may lose jobs overall.

Think of a new data center in your community. It sounds beneficial. But take the case of the Apple cloud data center recently constructed in Maiden, NC. This community once manufactured furniture and textiles. These businesses have vanished with most of the community's Main Street businesses and fast food locations.

The local government officials thought that the cloud would help answer the local unemployment woes. The Apple data center was completed with a budget of $1 billion. Temporarily, construction jobs were created. For all of this investment, only 50 full time long term jobs were created. This has been a major disappointment to the local community. They cannot comprehend that such a massive investment requires so few employees to operate and maintain.

It was anticipated that Apple's data center would create 250 indirect contracting jobs for maintenance and security. But many in this small community of about 3,400 people do not know anyone working at Apple. It is difficult for those who have not worked in the digital economy to comprehend that Apple's financial investment would have created thousands of new jobs in the past. Computers and software processing now do most of the work while the programming is often done by engineers in other locations like Silicon Valley, not by local residents hired by Apple. A hardware store owner said the only contact she has had with an Apple employee is when one came in to make keys for the facility.

The Washington Post article, "Cloud centers bring high-tech flash but not many jobs to beaten-down towns" illustrates the situation in Maiden. The article stated that the disappointing hiring picture "hasn't stopped state and local officials from awarding huge financial incentives to some of the biggest names in computing--Apple, Google, Facebook--to locate their data centers in the battered North Carolina foothills region, where unemployment is near 13 percent. Cloud computing is a fast-growing sector of technology, allowing companies to store data and run software on off-site servers. The data centers that power the cloud and run programs such as Gmail and iTunes employ thousands of servers but only dozens of people."

Todd Cherry, director of the Center for Economic Research and Policy Analysis at Appalachian State University, said data centers "are more of a political benefit for those communities and politicians than for the community itself. They give the region the psychological benefit of having someone who wants them--somebody wants to come there and locate there."

Employing only 50 people at the Apple data center does little for the local economy. For those few who have retrained themselves in IT, there is work. The number of local data center workers is small compared to the previous local employment levels.

The cloud data centers help enterprises that are rarely local, where the jobs are needed. On the positive side, the new jobs will likely not be exported overseas since the labor cost for the entire center is low, making overseas locations unattractive.