No silver lining in tax change
Last month the federal government released its National Cloud Computing Strategy, saying it would "encourage discussion between tertiary education stakeholders to consider strategies to ensure graduates have the right skill sets", and would ask the Australian Workforce and Productivity Agency to undertake "further examination of the current and future skill needs of the ICT industry". It gave no information on either of these initiatives, promising to release details later this year.
The strategy, however, clashes with moves announced by federal Treasurer Wayne Swan in April that from July 1 next year claims for work-related self-education expenses would be subject to an annual cap of $2000 a person. At the moment there is no limit on the amount that can be claimed.
Aidan Tudehope, managing director for hosting with Macquarie Telecom, said the $2000 figure would probably deter people from gaining additional skills in IT. "The reality is that the technical training courses tend to be more expensive than others, so this is not helping the more highly skilled people to become increasingly skilled."
Peter James, managing director of cloud services provider Ninefold, said self-funded education was a significant source of new skills in cloud computing. "Self-learning is happening particularly in the developer community, in the languages that harness the power of the cloud. Many of the apps are being built in open-source languages that you don't learn at university.
"Many of the people we hire don't have computer science degrees. They learn through community-based programs. They go to meet-ups where they share their learning. And their learning is self-funded."
Alan Perkins, CTO for Rackspace in the Asia-Pacific region, said the OpenStack open-source software of managing cloud computing environments was "the fastest growing open-source project in history and seems to be the de facto standard for open-source public and private, or hybrid clouds".
"More businesses are going to take advantage of having cloud on their premises because of OpenStack and there needs to be people who are well versed in running cloud within their organisations, particularly at the larger end of town."
Mr Tudehope predicted that the growth of cloud computing, as prescribed by the national strategy, would lead to an increase in the need for software development skills within enterprises at the expense of systems administration and IT management skills.
"Cloud computing allows a software developer to bypass the sysadmin and deploy their code directly onto servers because some cloud providers have made their portals very easy to use," he said.
"So I think there will be a power shift between the infrastructure folks and the software developers. When I look forward, software is king."
Sean McCartan, NSW general manager of IT recruitment company Talent International, also identified a shortage of cloud skills in organisations as a growing problem.
Frequently Asked Questions about this Article…
The federal government announced an annual cap of $2,000 per person on claims for work-related self-education expenses (previously there was no limit), with the change due to take effect from July 1 next year. For investors, this policy could slow the development of cloud and open-source skills that many tech firms rely on, potentially affecting recruitment, project delivery and the pace of adoption of cloud services.
Leaders quoted in the article note that many technical training courses and certifications for cloud computing and related open-source technologies are expensive. A $2,000 annual cap may make it harder for individuals to self-fund those courses, reducing the pool of skilled developers and engineers available to cloud providers and businesses adopting cloud technology.
According to industry managers, much cloud skill development happens through self-learning in developer communities—meet-ups, community programs and hands-on work with open-source languages and tools that aren’t always taught at university. That grassroots learning is a key source of talent for cloud apps and services.
The article cites Rackspace’s regional CTO saying OpenStack is one of the fastest growing open-source cloud projects and is becoming a de facto standard for public, private and hybrid clouds. As businesses use OpenStack and similar projects, demand grows for staff who can run and manage on-premises and hybrid cloud environments.
Industry commentators expect a shift toward greater demand for software development skills and fewer traditional systems administration or IT management roles. Cloud portals and platforms let developers deploy code more directly, creating a power shift toward software-focused roles.
A growing shortage of cloud skills can slow cloud adoption projects, increase recruitment and training costs, and make it harder for businesses to implement the national cloud strategy. For investors, that could translate into execution risk for companies expanding cloud services or relying on cloud-driven growth.
Investors may want to watch for company actions that address skills gaps—such as investment in training, partnerships with education providers, community engagement, hiring trends or explicit support for open-source ecosystems like OpenStack. These moves can indicate how well a business is preparing for talent constraints mentioned in the article.
The article quotes: Macquarie Telecom (Aidan Tudehope) warning the $2,000 cap could deter IT upskilling; Ninefold (Peter James) stressing that self-funded, community-based learning fuels many cloud developer hires; Rackspace (Alan Perkins) highlighting OpenStack’s rapid growth and its impact on on-premises cloud needs; and Talent International (Sean McCartan) identifying a growing shortage of cloud skills. Each perspective points to talent and training as key issues for cloud-focused businesses.
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