Stephen Gill, vice president and managing director of HP UK and Ireland, said on Monday that many large organizations currently devote around 70 to 75 percent of their IT budget to managing their existing infrastructure, leaving little room for innovation that can bring value to the business.
However, by embracing the idea of cloud computing--where applications are hosted and computing power is virtualized and available as a utility--HP claims companies are able to effectively outsource the need for maintaining complex infrastructure and reduce their IT headcount as a result.
"Overall you will see less people but with different jobs [and] more exciting roles," he said. "The junior roles are the ones that are usually dull and that will be automated anyway." HP is hanging its vision of how cloud computing will affect the industry around the term "everything as a service".
Gill claimed HP had been undergoing an internal reorganization--although it is not clear how much the strategy is related to cloud computing--that had seen it cut its IT staff from 19,000 to 10,000 over the past three-and-a-half years. "Most IT departments want to be flexible and responsive to the needs of the business and that is hard to if you are spending 70 percent of your budget on infrastructure," he said.
HP is not the first company to sound the death knell of the traditional IT department. The trend towards hosted applications, utility computing and outsourcing have all combined to prompt other vendors and analysts to predict an upheaval in the way companies will manage their internal IT in the future.
Back in 2005, analyst Gartner predicted that by 2010 IT departments in midsized and large companies will be 30 percent smaller than they were in 2005. "Jobs in technology infrastructure and services will decline in end-user organizations but grow in service, hardware and software companies, but many of these jobs will be in developing economies," the analyst claimed.