Virtualization shines in cautious IT hiring picture

Surveys showing the spending and hiring picture for IT as bleak for at least the first half of 2010 seem to reflect more the caution of IT managers and CIOs than their real hiring plans.

“IT budgets are flat right now because of the uncertain environment, but I expect as people become more confident, the real spending will rise to between four percent and five percent,” according to Andrew Bartels, IT spending and budget analyst at Forrester Research and author of a report released this month that predicts little, if any uptick in IT hiring during 2010.

“Actually we expect purchasing to be up about seven percent for the year, but the staff part of that spending is probably going to lag,” he said. “Companies will buy equipment, but they don’t want to make a commitment to people if they’re worried they’ll have to lay them off in six months.”

The report predicts IT spending will rise 6.6 percent in the U.S. this year, compared to a drop of 8.2 percent last year.

A survey of 110 IT managers at large companies by Wall Street analysts Wedbush Securities showed projects involving virtualization, Windows 7 and enterprise software were all high on corporate priority lists, and that the number of projects stalled for budget reasons has dropped from 38 percent in late 2008 to 18 percent during the last quarter.

If hiring does lag purchasing, this is going to be a good year for recruiters, according to Ellis Blevins, a division director for recruiting giant Robert Half Technology.

“What we see is an explosion in IT resource needs,” according to Blevin, who says increased demand her Denver-based group is consistent with IT hiring in other areas of the country.

“With the economy the way it was, everyone was in wait-and-see mode,” she says. “We have companies coming out of the block in Q1 with 30 people for this project, 40 for that; there’s a lot of pent-up demand coming to fruition.”

Many more of those job openings are coming in as contract-to-hire or full-time employment than has been true the past year, when temporary or contract-only jobs were a common option for companies that needed IT staff but didn’t want to commit to increased headcount, she says.

This quarter, according to a survey Robert Half Technology took of 133 CIOs from companies planning to add staff, business growth is the biggest reason driving the decision to hire. That’s followed closely by rising workloads and an increased need for customer or end-user support.

Fifty-eight percent of companies planning to hire IT people plan to hire only full-timers, the report also showed.

The return of demand might seem sudden, but so was the drop-off, according to Tom Silver, senior vice president of tech-job ad site Dice North America.

“In 2008 we were running average [numbers of job ads on] of around 85,000 until September ’08, when Lehman Bros. happened,” he says, citing the surprise bankruptcy announcement that shocked a shaky U.S. financial market.

“The job [ad] count dropped like a rock; by the end of the year we were down around 55,000,” he says. “As rough a year as ’09 was, the job count stayed relatively level. The lowest we got was 47,000; it started to tick back up in the fourth quarter. We’re over 50,000 and we’re projecting that to continue to improve.”

Virtualization, Cloud Pros in Demand The tech in highest demand according to its mention in job ads is programming in Java or J2EE, or database administration, because those skills are part of almost every IT project.

Among the fastest-growing skills, however, are virtualization-which at about 2000 ads is 21 percent above this time last year-and cloud computing, which went from zero last year to 300 today.

“So most other things are flat or down and those two are growing,” Silver says. “You also see companies like USAToday, Delta, Newsweek or Netflix posting them, so it’s not just the higher-tech Silicon Valley companies that are looking for virtualization.”

That demand reflects a need to get stalled IT projects back on track, and infrastructure improvements completed, Blevin says.

“Network administration, virtualization, system administration, those are the heavy-hitting job requests right now-the ones companies need to get themselves up to speed as the economy comes back,” Blevin says. “They want to rapidly develop and deploy applications without issues about servers and infrastructure. Everyone wants to be able to get what they need and get it quickly.”

Bartels, however, like his survey respondents, is only cautiously optimistic.

“Virtualization obviously, is one of the big priorities [for 2010], but even more than most things, adding more virtualization doesn’t mean you’re going to add more virtualization staff,” Bartels says.

Virtual servers are so much easier to maintain than physical servers that it’s possible for very small staffs to manage large virtual infrastructures, reducing the number of bodies needed in the data center.

A November, 2009 report from Enterprise Management Associates, which was sponsored by VMware, says that in U.S. companies the average number of physical servers one administrator manages is 65. The average for virtual servers is 77. That’s not shockingly high, but it does represent an increase in staff efficiency (and a reason not to need to hire more staff) of about 10 percent.

“Once you hire someone who knows virtualization, when you acquire more licenses, you don’t necessarily have to acquire more staff,” Bartels says. “Even if spending on virtualization software and tools goes up far more than other things-even 10 or 15 percent, staffing might only rise by one percent.”

On the other hand, “if you can use virtualization to save some IT dollars, you can add a person to your staff that you’ve wanted to for a year and a half and haven’t been able to,” Blevin says.

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Jim Love, Chief Content Officer, IT World Canada

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