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Cloud computing is driving a new gig economy in tech

I would be remiss if I told you that I came up with this idea myself. My good friend Joe McKendrick recently covered this trend that I’ve seen happen as well.

Recent layoffs in the tech industry are fueling a wave of what some call “independent entrepreneurs” taking temporary jobs or freelance contracts. Think DoorDash or Uber Eats, but instead of delivering Thai food, people provide key cloud advisory services or even entire cloud-based systems out of the box.

This is due to the anticipation that a slowing economy is likely to reduce technology sales. But also, a cloud skills shortage is occurring simultaneously. We’re not preparing enough cloud professionals to meet the demand, but at the same time, technology companies are laying them off. Go figure.

This has been evolving for years as workers understand the value of the sharing economy and may be seeking greater independence and less labor dependency on larger tech players. Many tech professionals are exploring more entrepreneurial options rather than opting for standard full-time jobs and cushy benefits with companies that can’t, and never could, guarantee a job for life.

In fact, 63% of tech workers report starting their own company after being laid off, according to a recent survey of 1,000 professionals laid off in recent years. Most of these startups (83%) exist in the technology industry, especially cloud computing.

The people who do these temporary cloud-based jobs are cloud professionals with years of experience and people who have recently become certified. Most are finding that just as cloud computing better supports a remote and distributed workforce, the cloud can also be leveraged for the mercenary work of cloud technology. This, coupled with the dearth of cloud skills, means that even those with the most rudimentary skills find they have a full dance card.

It was also reported in the survey that those who venture out on their own see an average increase of $13,000 in annual income and 58% feel better about their new job security. These new entrants are focused on being a unique human asset for sale in the marketplace or are starting their own businesses, including hiring employees and investing their own money, at least $20,000, to build it into a growing business venture.

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I suspect that many of these entrepreneurs will reach a multi-million dollar valuation (depending on the type of cloud technology business) after a couple of years and average growth. I have personally seen this many times. It outperforms most 401(k)s.

It is also interesting that according to the survey, 93% report that they now compete with the company that let them go. Think “vault store” from Larry David’s “Curb Your Enthusiasm.”

This will have an overall positive effect on the technology industry and specifically on cloud computing, as these types of companies drive more innovation. They are not hampered by big corporate governance and company politics. Creativity and innovation are directly rewarded with sales and increased business value. This will also increase the number of wealthy people in the tech industry, as this model will better disburse wealth among more tech industry contributors.

Also, larger companies find it easier to hire temporary workers rather than commit to hiring an employee. They are easier to use and then drop if no longer needed. HR departments do not have to manage the relationship and much of the legal risk is eliminated.

Is this a good option for you? Many people choose the gig model after a layoff and have actually found that it is a better option than simply looking for another job. Some may return to the corporate ranks when the right job comes along. However, many cloud professionals will remain on the entrepreneurial path, even though they never really planned to be on that path. They find satisfaction and value in going it alone. Good for them.

Copyright © 2023 IDG Communications, Inc.

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