Cloud Computing Adoption to Outpace Employee Skillsets in 2014

Fifty percent of organizations will spend more on IT in 2014, investing heavily in public and private cloud-enabling technologies like infrastructure and virtualization, according to a survey of 1,000 IT professionals. However, half of all respondents participating in cloud initiatives within their organizations need more education on the technology and note their current skillsets do not adequately prepare them to do their jobs well in the coming year.

The survey, conducted by next generation IT monitoring software provider ScienceLogic, found that lack of education is not the only headache employees will face in the coming year. While IT spend is increasing in 2014, survey results reveal a lack of industry investment in employees, with 40 percent of respondents confirming they would make the same or less money year-over-year in 2014.

Other key survey highlights include:

-- Overall IT spending in 2014 will increase by a net margin of 35 percent compared to 2013

-- Almost two thirds of respondents intend to increase their budgetary spend by 6-20 percent year-over-year

-- The ratio of respondents that will increase IT spend vs. reduce IT spend is 4:1

-- Organizations will spend the most IT dollars on network infrastructure, but there is a growing need to spend on additional storage, Big Data, and mobility-related infrastructure

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IT Professionals Salaries Remain Flat

The 2014 Salary Survey, just released by Janco Associates and eJobDescription.com, is not good news for IT Professionals.  The survey shows that hiring and salaries has not significantly improved for IT professionals in most North American metropolitan areas.

Salaries are up less than 1% for IT pros in the past 12 months and the only winners are the top level postions in mid-sized companies.  Salaries for most IT pros have finally gotten back to the level they were at in 2007 and that is a very good sign.

The seven major findings of the survey are:

-- IT compensation for all IT Professionals has increased by 0.67% in the last 12 months.

-- CIOs compensation has stayed flat in larger companies and increased in smaller and mid-sized companies in the past 12 months.

-- Positions in highest demand are all associated with the quality control, BYOD implementation, and service level improvement.

-- Over the long term IT executives have fared better in mid-sized companies than large companies.

-- In 2013 the IT job market grew by 74,900 versus 62,500 in 2012 according to the Bureau of Labor Statistics (BLS) – better but not enough to employee the number of IT graduates from US universities or to increase demand.

-- Lay-offs seem to have tapered off, however some companies continue to cut the size of the IT organizations.

-- Cost control is still the rule of the day; however we have seen an increase in the number of "part-timers" and contractors who are focused on particular critical projects. This has resulted in few IT Pros getting health coverage

-- On shore outsourcing has peaked and companies are looking to bring IT operations back into their direct control and reduce operating costs.

-- Mandated requirements for records management systems and electronic medical records have increased the demand for quality control staff and custodians (librarians) of mechanized records.

-- Companies are continuing to refine the benefits provided to full time IT professionals. Though benefits such as health care are available to 80%, IT professionals are now paying a greater portion of that cost.

 

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CIOs Reveal Many Are Unprepared for Digitalization: the Third Era of Enterprise IT

Digitalization, the third era of enterprise IT, is beginning, but most CIOs do not feel prepared for this next era, according to a global survey of CIOs by Gartner, Inc.'s Executive Programs. The survey showed that many CIOs feel overwhelmed by the prospect of building digital leadership while renovating the core of IT infrastructure and capability for the digital future. The survey found that 51 percent of CIOs are concerned that the digital torrent is coming faster than they can cope and 42 percent don't feel that they have the talent needed to face this future. 

The worldwide survey was conducted in the fourth quarter of 2013 and included 2,339 CIOs, representing more than $300 billion in CIO IT budgets in 77 countries.

During the first era of enterprise IT, the focus was on how IT could help do new and seemingly magical things — automating operations to create massive improvements in speed and scale, and providing business leaders with management information they never had before. The last decade has represented the second era of enterprise IT, an era of industrialization of enterprise IT, making it more reliable, predictable, open and transparent. However, while this second era has been necessary and powerful, tight budgets and little appetite for risk left scant room for innovation. 

Entering the third era of enterprise IT technological and societal trends, such as the Nexus of Forces and the Internet of Things, are changing everything; not only improving what businesses do with technology to make themselves faster, cheaper and more scalable, but fundamentally changing businesses with information and technology, changing the basis of competition and in some cases, creating new industries. 

Most businesses have established IT leadership, strategy and governance but have a vacuum in digital leadership. To exploit new digital opportunities and ensure that the core of IT services is ready, there must be clear digital leadership, strategy and governance, and all business executives must become digitally savvy. Indeed, the 2014 CIO Survey shows that the CEO's digital savvy is one of the best indicators of IT and business performance. 

CIOs report that a quarter of IT spending will happen outside the IT budget in 2014 — and that is the spending they know about; the reality may be significantly higher. This is a direct result of the new digital opportunities that are more entwined with customer and colleague experiences, and that may, in some cases, reflect concerns that the IT organization is not fast enough or otherwise ready for more digital opportunities. 

"There is an inherent tension between doing IT right and doing IT fast, doing IT safely and doing IT innovatively, working the plan and adapting," said Mr. Waller. "The second era of enterprise IT has been all about planning IT right, doing IT right, being predictable and creating value while maximizing control and minimizing risk. However, to capture digital opportunities created by the third era, CIOs need to deal with speed, innovation and uncertainty. This requires bimodal capability — operating two modes of enterprise IT — conventional, or "safe and steady" IT, and a faster, more agile nonlinear mode." 

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Rate of IT Employment Growth Continues to Decelerate

The number of IT jobs grew 0.03 percent sequentially last month to 4,521,400, according to TechServeAlliance, the national trade association of the IT & Engineering staffing and solutions industry. On a year-over-year basis, IT employment has grown by 4.56% since December 2012 adding 197,100 IT workers.

Engineering jobs grew once again in December, up 0.13 percent sequentially last month to 2,479,300.  On a year-over-year basis, engineering employment has grown by 1.39% since December 2012 adding 33,900 engineering workers.

"While IT employment grew almost three times the rate of the overall job market last year, the rate of growth decelerated throughout 2013. On the engineering side, the pattern of modest though irregular growth continued in December," stated Mark Roberts, CEO of TechServe Alliance. "When you look at the recently released jobs report which underwhelmed nearly everyone, it is hard to be too disappointed in the IT and engineering employment picture in 2013. While employers clearly exhibited more caution in the latter half of last year, there are signs that the rate of growth of IT and engineering employment should strengthen as 2014 unfolds," added Roberts.

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Worldwide IT Spending on Pace to Reach $3.8 Trillion in 2014

Worldwide IT spending is projected to total $3.8 trillion in 2014, a 3.1 percent increase from 2013 spending of $3.7 trillion, according to the latest forecast by Gartner, Inc. In 2013, the market experienced flat growth, growing 0.4 percent year over year. 

Spending on devices (including PCs, ultramobiles, mobile phones and tablets) contracted 1.2 percent in 2013, but it will grow 4.3 percent in 2014. Gartner analysts said convergence of the PC, ultramobiles (including tablets) and mobile phone segments, as well as erosion of margins, will take place as differentiation will soon be based primarily on price instead of devices' orientation to specific tasks. 

Enterprise software spending growth continues to be the strongest throughout the forecast period. The 2014 annual growth rate is expected to grow 6.8 percent. Customer relationship management and supply chain management (SCM) experienced a period of strong growth. 

The Gartner Worldwide IT Spending Forecast is the leading indicator of major technology trends across the hardware, software, IT services and telecom markets. For more than a decade, global IT and business executives have been using these highly anticipated quarterly reports to recognize market opportunities and challenges, and base their critical business decisions on proven methodologies rather than guesswork. 

Last quarter, Gartner's forecast for 2014 IT spending growth in U.S. dollars was 3.6 percent, a 0.5 percentage points higher than the current forecast. 

The data center systems spending growth outlook for 2014 has been cut from 2.9 percent in our previous forecast to 2.6 percent. This is mainly due to a reduction in the forecast for external controller-based storage and enterprise communications applications. These segments represent 32 percent of total data center system end-user spending. 

Gartner has slightly revised downward the IT services compound annual growth rate between 2012 and 2017. The largest contributor to this revision comes from reductions in IT outsourcing — specifically, in colocation, hosting and data center outsourcing growth rates.