Cloud skills gap costing large enterprises over $258m a year: study

cloud skills gap
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Large enterprises across the world are losing out on over $258 million a year as a result of a cloud skills gap, according to a new report commissioned by Rackspace in collaboration with LSE academics.

The study also found that this lack of expertise is stifling creativity, with 80% of IT pros saying they could bring greater innovation to their organization with the right cloud insight.

Beyond innovation and growth, 44% of IT decision makers believe a lack of skills is causing a lag in their organization’s ability to deploy cloud platforms. The majority (77%) also believe they need to invest more in their workforce to meet the developmental challenges of cloud computing.

“While the rise of artificial intelligence and automation may cause some to think that human insight is less important, our report shows that this is not the case,” said John Engates, chief technology officer at Rackspace. “With technology and the cloud now underpinning business transformation, the growing technology skills gap means organizations must have a strategy to access the expertise needed. Those that don’t will struggle to be competitive and innovative.”

The report also found that IT decision makers are seeing the benefits of moving all or part of their IT estate to the cloud, with 54% of respondents saying their organization has already seen a positive return on investment (ROI) on using the cloud, with a further 30% expecting the cloud to deliver positive ROI in the future.

Despite the benefits, both IT pros and IT decision makers appear frustrated at not being able to use the cloud to its full potential:

  • 54% of IT pros are spending more time than they expected managing daily cloud operations
  • 50% of IT decision makers acknowledge that a lack of expertise is holding their business back
  • 96% of IT pros said that deeper cloud expertise within their organization would help it increase the cloud’s ROI

 Nearly half of IT decision makers (54%) find it hard to recruit the right talent to help manage their organization’s clouds. Cloud security (36%), automation (34%) and migration project management (32%) are the skills IT decision makers find hardest to recruit. Meanwhile, the challenges associated with recruitment are likely to increase.

“Put simply, cloud technology is a victim of its own success,” said Will Venters, assistant professor of information systems at LSE. “As the technology has become ubiquitous among large organizations – and helped them to wrestle back control of sprawling physical IT estates – it has also opened up a huge number of development and innovation opportunities. However, to fully realize these opportunities, organizations need to not only have the right expertise in place now, but also have a cloud skills development strategy to ensure they are constantly evolving their IT workforce and training procedures in parallel with the constantly evolving demands of cloud. Failure to do so will severely impede the future aspirations of businesses in an increasingly competitive digital market.”

As part of the report, Rackspace and LSE have provided advice on how organizations can navigate cloud expertise skills gaps in their business:

Splitting the IT function into separate streams: Conceptually dividing IT functions into two parts will allow businesses to focus on the dual priorities of business-focused digital innovation and operations focused innovation – both essential to helping an organization accelerate in a technologically led market.

Developing a cloud skills strategy: Every enterprise IT executive should adopt a cloud skills strategy, which will map current skills in the organization, map future innovation trajectories and changes (both within the business and in cloud), and match these with realistic market analysis of the available talent pool.

Full assessment of the cloud ecosystem: Organizations should adopt an ecosystem approach to the provision of basic cloud services (for example pooling risk by relying on providers). As a result, the dual challenge of both constantly improving and significantly innovating can be greatly improved by relying on a balanced pool of skills and competencies both within and beyond the organizational boundary.

The Cost of Cloud Expertise report comprises research amongst 950 IT decision makers and 950 IT pros – as well as in-depth conversations with IT leaders – in large enterprises around the world.

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