Ask HN: If I Close My Data Centers, What About the People/Jobs Lost?

[throwawayacct4q]

(throwaway account)

I have a chance to basically migrate 90% of my F50's data centers to commercial providers. The cost savings are awesome, but what about the people currently doing legacy stuff? theyre doing stuff like manual config, and future state is everythign automated as much as possible in the cloud and shutter the data centers.

I think the harsh truth is that many wont have jobs post move, but maybe I'm being cynical. maybe theres a chance to retrain the employees, but even doing that automation generally reduces the workforce.

whats your take? what do I tell current employees? how many can I realistically be able to save from being jobless?

[jedberg]

When Netflix moved from the datacenter to the cloud, there were a whole bunch of really good people with skills we didn't need anymore -- sysadmins, DBAs, datacenter techs, etc.

Netflix went to them and said, "do you want to learn some new skills that apply to our new cloud based infra?" Some said no, and were given big severance checks and glowing recommendations. Others said yes, and were retrained.

And some were retrained but it didn't work out, it turned out they weren't interested in the new work, or just weren't needed, and so they too were given big severance checks and glowing recommendations, and went to look for new jobs using both their old and new skills.

It's nice that you're worried about them, but the best thing you can do for them is offer them the chance to learn new skills, either through new jobs or paying for them to learn new skills.

[brianwawok]

This seems best - offer them the choice.

Don't go "learn to code cloud formation in 30 days or lose your job with no severance".

[boulos]

Disclosure: I work for Google Cloud (and I assume/hope someone at Google is competing for your business).

Some of those folks happily do updated things, but others (like people that rack servers) won’t have an obvious new role in a cloud focused world.

My (now) colleague at Nic Harteau gave a talk at our Leaders’ Circle event talking about precisely this in Spotify’s move to Cloud: how could he keep the infrastructure team as they moved to cloud? As it turned out, most of them happily adjusted what they were doing because the mission was the same: serve the product teams / groups that need infrastructure from them. Sure, now you don’t configure a physical firewall, but there are still firewalls in cloud. In a sense, they’re even more important!

I believe Nic said only one person from the group left. The engineer was focused on building their own SDN stack on-prem. That job, and other “things the provider completely handles” do go away. But that person likely would have been massively useful in helping guide how Spotify should use Google Cloud’s own SDN setup. There are lots of ways to architect how services interact in clouds, and a lot of it comes down to funny networking.

So I’d say more than you might think, but please don’t mislead them.

[tucaz]

I will assume that at the current state you are able to pay both the datacenter costs and people costs since it seems that is what you are currently doing.

With that assumption in mind, if you do migrate and realize that you now don’t need 80% of the people you needed before, it could mean one of two things:

- you are now able to pocket whatever savings you were able get from the migration and either save it or invest in something to potentially keep that money in the economy, just in a different way

- you now have 80% of your people free to do whatever other things you didn’t do because they had to maintain datacenters. That is huge in terms of efficiency gains and allows you to redirect that money to increase the value provided by your company either by repurposing the current workforce or getting rid of them and bringing people you could previously not bring on board due to existing costs

Either way I believe that everybody is better off After the changes.

Efficiency gains such as the one you are describing is what makes it possible for economies to grow and keep moving forward.

Can you imagine if you had to handle cows, pigs and farms to have a BLT? It’s very good that such things are outsourced because that allows for improvement that would otherwise not be possible.

[subway]

Odds are high that the anticipated cost savings sits largely on the folks they intend to sack, rather than on any power/real estate/bandwidth/hardware savings.

[s73v3r_]

The people who would be laid off are likely not better off.

[southern_cross]

Since you're thinking towards the future, think also to the time when you will probably have to move an awful lot of your stuff back in-house, which might be much sooner than you'd expect. Plenty of companies which outsourced in a big way some years back have already been through a similar cycle.

A former Fortune 500 employer of mine went through the outsourcing boomerang. Now I understand that they have big plans to move everything to the cloud within the next two years. Knowing their systems like I do, and knowing that the CEO who is driving this is fairly noobish (note that I said CEO rather than CIO), I don't think this plan is going to work out too well for them. But given that since I left they've had to file bankruptcy, and in doing so involuntarily dropped to about half of what they were before (employees, assets, etc.), I guess this is just par for the course for them now.

[gjkood]

You obviously have a good heart for asking the question!

I have a feeling that whatever decisions you finally take would take into consideration the wellbeing of your employees.

I would assume that the folks who are doing the legacy stuff have the necessary aptitude to pick up the skills that are needed to automate for the future. Can their existing data center skills be translated into learning about AWS/Azure, VMs, Containerization and the necessary scripting and DSLs around those toolsets?

Obviously there will be reductions in headcount but give them the option to retool for the future. Even if they are not all retained but if you retrain them then they will still have options elsewhere with relevant skillsets.

You are finally running a business after all where revenue and profit are the drivers.

Good luck and I would say that your employees are luckier than those who consider them as mere resources and not people with lives and loved ones to take care of.

[supahfly_remix]

Are you sure the savings will be real? I've read that real savings results from using the cloud for bursts while keeping the base load on-prem. (Never done this personally so can't speak from experience.)

Once you let those people to you will be losing their knowledge in this area. Not sure if it matters.

[friedman23]

I really think the worst thing you could do is continue to run the business in an inefficient manner. Improving technology and as a result efficiency is the reason we have advanced so much as a species.

However, you don't need to be callous in your pursuit of efficiency. You should try to give these people an opportunity to update their skills and get a new position. You might not be in a position to do that however.

[joewee]

There are a lot of benefits to migrating to the cloud, in my experience, cost isn’t one of them. Unless of course you are mucking around with accounting tricks by cutting employees and moving that cost to services or cost of goods sold, I’m not a expert in this, but it works and will save you money because you can control these expenses more easily and because of how payroll vs services are accounted for.

You should aim to keep 50% of your workforce. 25% won’t want to change 10-25% won’t be able to. I would invest in training on automation and multicloud / hybrid cloud management. I recently worked on a large scale migration and you will definitely discover that the cloud wont work for a lot of your high performance computing, or it will be cost prohibitive. You also need to take into consideration intellectual property, does the company really want all of its IP on another conglomerates infrastructure? But most importantly you need to avoid lock-in to one provider at all cost, training your trusted resources who understand the business requirements on hybrid cloud or multi cloud implementation will really enable cost savings because you will have leverage during price negotiations. If you get locked into one provider you are going to get royally screwed on long term cost, seen it happen.

[eksemplar]

We’re in the process of moving our infrastructure to Azure. Being the public sector we take things relatively slow, but we’ve already fully embraced Azure ad as well as office 365, one drive for business, planner and all those other things.

The next step is our servers, they are already virtual and hosted in our own cloud, but moving our database cluster to a commercial cloud is still a big step politically.

Anyway, you retrain your employees. You may need fewer in the long run, but finding people who are actually professional at stuff like setting up on-premise security inside Azure hasn’t been easy for us. We’ve had 3 very highly regarded consultant agencies to help us, and they quite honestly didn’t know anything but tech-book Azure. More than once we’ve had to send consultants home because it became obvious they knew less about this stuff than our people.

Azure has also opened up for a range of automation through services, but that’s not really automatic either. We’ve had to retrain our people in powershell, and now we’re running a lot of stuff through the orchestra service. So right now, we’ve actually not needed fewer people, just better trained ones.

I image you could replace Azure with Aws or any such service and it be the same story.

[int_19h]

If you don't mind me asking - why Azure specifically?

[codingdave]

If you are in a position to make decisions for that many people, is it a safe assumption that you have a fairly robust knowledge of how to enact organizational change? Because based on my limited knowledge, major change like this has processes to be worked through which will help answers some key questions -- what is the current and future state, who will gain/lose, what will your communication plan and transition plan be, etc.

You have much more knowledge to give those answers than we do. What to tell employees, and who can/not be saved from losing their job depends on those answers.

I will say that open communication, with complete answers of what people should expect, will help the change to happen without losing the trust of those who do get to stick around. You will have some harsh truths to share. If I worked for you, I would want to hear them as soon as there are enough answers to not leave me in limbo on how it affects me, personally. Not sooner, not later.

[cjalmeida]

I would second this comment and add that proper change management is needed to ensure a smooth transition. As soon as the word is out, if you don’t have a plan and/or don’t communicate in the right way, your people will start sending out resumes and that can wreck havoc in your business.

As you might expect, replacing top notch techies is quite hard. So managing the transition and making sure those that won’t be kept are better off is not only a good heartened approach but important to the success of the project.

Management consultants usually get a bed rep but that’s something they’re pretty good at. If you’re an F50, you have the budget to hire a top one.

[lsc]

so, uh, I'm not weighing in on the job stuff... but I suggest you check your numbers on how hosting in the public cloud is cheaper than your own data centers.

I mean, sure, automating things is great, and running your own hardware cloud-style is great for a lot of workloads... but that doesn't have a lot to do with the decision to rent rather than own your servers.

Cloud providers charge a lot compared to owning your own hardware, unless your load is extremely bursty.

The bandwidth prices are particularly eregrious. They are like what you would pay for bandwidth 10+ years ago.

I personally ran a small VPS company and managed to turn a (small) profit while selling compute for rather less than amazon, even though I had to rent space and power from a fancy pants datacenter by the rack. I was essentially paying retail, and I only had 20-30Kw of capacity, max, and even at that scale, owning was cheaper than renting.

I can only imagine that at F50 scale, the economics tilt even further towards own, as you can much better amortize the labor than I could

(and it's not like the datacenter loses money, either. Renting datacenter space is like renting commercial realestate. When your lease is up, the renewal rate goes up to whatever competing space costs + what it costs you to move. Owning is so much better in that respect.)

[empath75]

Amazon etc negotiate prices for large accounts so the price you pay will not be the same price that a Netflix pays.

[segmondy]

Just do it. Most old school sysadmins want to write their Perl and sh scripts not terraform and cloud formation scripts.

I got my devs to embrace GCP, AWS, ansible, terraform, docker, k8s, devops and SRE before most of the admins. Most of them left to go safe companies where they can stick to their old ways.

[gaius]

I got my devs to embrace GCP, AWS, ansible, terraform, docker, k8s, devops and SRE before most of the admins.

Yes, devs are often enthusiastic because they think they can ditch those boring old operations people who always stop them having fun.

Next thing they know they're on call 24/7 and don't get to write application code anymore, just operations stuff...

The truth is the need for ops people doesn't evaporate when you go cloud, be wary of anyone who says it does. This is the same dynamic that played out with MongoDB.

[empath75]

I was an admin that learned to be a dev specifically so I could work on cloud stuff. I almost doubled my salary in 3 years.

[zer00eyz]

Cloud/Comerical <> automation.

I have been burned in the past by "commercial", thankfully I wasn't the guy who had to go to the board hat in hand and say "this isn't in our control"...

Every comercial provider is going to do everything in their power to "lock you in" they are going to put up features that are "better enough" that you migrate to them and then they own you.

Automate, reduce your workforce as needed (it will be less than your plan) and then look at the commercial provider as a second step, look at them in relation to a real DR plan. You might not like what you see for day to day operations but having them on stand by in the even of an emergency could make you a hero and present a massive cost savings already.

[georgebarnett]

I have some experience in this area. My thoughts:

Retraining can be done as part of the project, but you need to figure out what the project and sub projects looks like first. Then you an know roughly how you’ll move people around at various phases. It takes time to build new systems and time to train. Line those up and you can take advantage of them.

Be careful with costs. They will blow out if you aren’t mindful.

It’s going to be messy for a LONG time, which causes a huge amount of pain in the org. Be ready for this.

Moving to cloud brings a whole new set of problems you haven’t thought of yet. For example, cleanup becomes more critical (old resources cost money, but can’t be “seen” because they’re not physical and just a hidden line item somewhere).

There’s more. My email is in my profile if you wish to reach out.

[nasmorn]

Cleanup is even a problem in smallish startups with some dozens off devs. I cannot imagine the amount of security groups a F50 must have after some years

[synesso]

This happened to my friend in his 50s. He was a storage specialist working for a bank. Since they outsourced to IBM a few years ago he's been stacking shelves in a supermarket.

[markbnj]

If you let yourself get that specialized then you're always going to be one or two innovations away from a layoff. I kind of feel that anyone who inhabits a niche like that for a long time is going to be in danger of becoming a victim of their own comfort seeking. Our industry is not kind to those who don't continually challenge themselves and learn new things. As a counter example to your friend's situation, I'll be turning 58 this november, and I'm an SRE/devops engineer working on kubernetes-based infrastructure in google cloud. Five or six years ago I was a back end .NET guy, a few years before that I was doing ASP web apps. Before that C++ and COM/DCOM stuff, and before that Orbix/CORBA, and before that... you get the picture. The old saw is that nothing stays the same, so if you're not moving with the world you can be sure it's moving past you.

[kriss9]

You're taking the marketing approach as opposed to coming up with real solutions -- think critically about the business need, investigate the cost savings and make a transition plan for those who actually add value to the organization.

1) Consider if your organization has a future strategic value for having the org capability in house (is this datacenter simply a necessary evil or does your organization deploy new technologies to new locations for any part of its business)?

If so, you may be outsourcing a core part of your organization's capability (consider it). If not (e.g. these are all simply HR and other general business systems [ or services which do not depend on anything physical], you should proceed to evaluating costs

2) By the thought that you would outsource the majority of jobs means that you probably shouldn't have had the employees in the first place (in the Fortune 50 I know, we mostly used contractors with a quarter dozen employees). Hence I would evaluate if there are other business units which might benefit from their skill (power related, analyst related et al) and offer training per the previous notes.

A good decision to be a part of and my hope is that your answers here inspire the right questions (to allow for the right transition plan for your organization and company as a whole).

[ezequiel-garzon]

Out of curiosity, what does F50 refer to here? Google doesn’t help, nor does https://en.m.wikipedia.org/wiki/F50 .

[dankohn1]

It refers to the 50 biggest companies in the https://en.wikipedia.org/wiki/Fortune_500

[tills13]

Fortune 50, I assume.

[downrightmike]

Good luck being at someone else's mercy when the problems that are being held together by duct tape come to a head.

[omeid2]

At the same time, I rather negotiate with a service provider than employees who have implemented their position into the system.

[kylec]

Since it sounds like you're going to save a bunch of money, I suggest letting them go and using that money to provide very generous severance packages (months of salary at least). Then they can choose to retrain themselves, take some time off, whatever. It works for Netflix.

[ultrasaurus]

Kudos for keeping your sights on helping your team! I'm a big fan of holding on to a group of people that understands your business (I'd rather retrain a technology than instill passion and domain experience).

Not 100% relevant (and not my better writing) but here are some of the things I've seen companies do in terms of moving people around from NOCs that might give you some ideas https://www.pagerduty.com/blog/future-of-noc/

If you'd like a soundingboard to brainstorm with feel free to ping me at [email protected]