This morning’s job numbers indicate a declining unemployment rate.  That’s the good news, but the bad news is that it is due to a declining population of job searchers and NOT growth in the number of jobs.   According to labor statistics for April 2012, GDP growth is 2.2% and the unemployment rate is 8.1% with record low labor force participation rates. Against this larger employment picture, what does the WaveLength Tech Jobs Index look like for the Bay Area?    In a word, it’s lukewarm.

Source: WaveLength Market Analytics LLC, April 2012

As the chart indicates, current tech jobs demand is about equal to the spring of 2010, as the US economy struggled to recover from the cataclysmic events of fall 2008.  Demand peaked about a year ago, and fell off fast when first quarter 2011 gross domestic product (GDP) numbers came out to be lower than expected.  As the following table indicates, the WaveLength composite is down nearly 37% from that March 2011 peak.

Since December 2011, which is traditionally a time when demand softens, there has been definite improvement.  The WaveLength Composite for the Bay Area is 3.4% higher.  The biggest demand gains are seen in sales and product management functions, which show respective increases of nearly 19% and 17%.  Product marketing demand is still declining with a drop of 5.3%.

Source: WaveLength Market Analytics LLC, April 2012

To end on a more optimistic note, since the advent of the index in the fall of 2009, demand is nearly 100% higher for all tech job functions.  Application development demand has been consistently up the most.  Marketing-related functions have consistently lagged, but demand is still well off recession lows.  So… in other words, we’ve already seen the worst.  While demand is likely going to remain lumpy and highly tied to GDP growth, but unlike many other US industries, at least we have tech jobs demand.

Methodology

The number of job postings is collected every Wednesday using well-known job sites and then calculated into the index for each job function.  The index contains 6 common functions found in every technology company, including product marketing, product management, application developer, network engineer, sales, and marketing.  The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite. The program was includes coverage of 10 high tech cities since October 28, 2009.  We update our research monthly.  We feature 10 geographic markets– Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC.  Feel free to visit http://www.wlanalytics.com/wordpress/.

Source: WaveLength Market Analytics December 2011

As the chart indicates, tech jobs demand in all cities sharply peaked in March 2011.  While each city has its own story to tell, all cities clearly saw an apex last spring, declined sharply until fall when declines moderated.  The Bay Area, home to many of the industry’s largest tech companies, finished out 2011 with an index value of 202, making it the city with highest tech jobs demand.  The fast-growing tech city of Austin finished the year at 183, giving it second place.  Communications-oriented Denver just edged out Dallas to finish third.  Another communications-oriented city, Raleigh-Durham even finished comparatively strong.  Meanwhile, the traditionally steady labor market around Washington DC, bucked the trend.  While not usually subject to the same volatility as the rest of the US labor markets, DC tech job demand dropped below levels seen in October 2009 (when the WaveLength Index originated).  Seasonal disruptions in hiring certainly play a role, but perhaps secular shifts to IT outsourcing and cloud computing may be showing some initial impact.

Source: WaveLength Market Analytics December 2011

So where are the surprises?  What are the positive signs?  The above table tells us that the surprise is that the Research Triangle area.  With tech job demand declining at only 8% and 20% year over year, it’s a top performing market.   The demand declines in tech-heavy Seattle are the steepest, particularly interesting when compared to the Bay Area.  Now for the positive sign — Bay Area is showing signs of stablizing tech job demand posting a modest 2% decline in Fall 2011.

Source: WaveLength Market Analytics December 2011

Looking at US-wide demand, some tech job functions fared better than others in 2011.  The above chart is based on data that is not limited to our 10 tech cities.  It clearly shows that demand for marketing-related functions increased faster than technical or sales roles, and that they also suffered the most severe demand declines.  While it looks like demand for technology sales people has barely moved, the value more likely reflects that demand holds steady.  Even in the worst of times, companies need sales people.  To a degree, it’s the same with technical job functions.  In the worst of times, application engineers and network engineers are still required to create and maintain; it may mean enterprise IT is more likely do more maintenance than more labor-intensive creation.

Source: WaveLength Market Analytics December 2011

It’s always good to remember that although the WaveLength Index shows that demand was slower last year, it’s still much better than it was in 2009. Remember how bleak the job market was in the summer and fall of 2009?  As the chart above shows, demand for tech jobs is still considerably higher; it’s 100% higher in the Bay Area and around 60-80% higher in most cities.

Source: WaveLength Market Analytics, December 2011

As usual, check back for updates.  The next blog will focus on the Bay Area’s tech job functions.  WaveLength Market Analytics also intends quarterly updates.   In the meantime, if you want to know how demand for specific tech job functions is faring in one of the other nine tech job markets we cover, just let us know and we’ll be happy to publish those results, too.

Methodology

The number of job postings is collected every Wednesday using well-known job sites and then calculated into the index for each job function.  The index contains 6 common functions found in every technology company, including product marketing, product management, application developer, network engineer, sales, and marketing.  The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite. The program was includes coverage of 10 high tech cities since October 28, 2009.  We update our research monthly.  We feature 10 geographic markets– Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC.  Feel free to visit http://www.wlanalytics.com/currents/.

As the chart indicates, demand has sharply declined since the heady days of March 2011.  As the economy slowly recovered throughout 2010, demand spiked in the six months between September 2010 to its March 2011 peak.  From there, declines have been dramatic to result in year over year declines across all tech job functions and the general Bay Area labor market.  Technology marketing and sales functions have declined the most, falling nearly 23% year over year.  Application developer demand held steady with a very small decline of 1.4%.

Source: WaveLength Market Analytics, September 2011

Not all the news is bad, though.  Remember how bleak the job market was in the summer and fall of 2009?  The nation was still in recession with a negative GDP, as opposed to the slow and steady GDP growth throughout 2010.  So how has technology job demand  changed since that time?  Demand for tech jobs is still 83% higher.  For application developers, demand is 119% higher and for technology marketing, demand is up 89%.  Even demand in the general Bay Area jobs market remains 68% higher from 2 years ago.

Bottom line is our industry still 1) has much healthier demand than it did two years ago, and 2) outperforms the general labor market.

Methodology

The number of job postings is collected every Wednesday using well-known job sites and then calculated into the index for each job function.  The index contains 6 common functions found in every technology company, including product marketing, product management, application developer, network engineer, sales, and marketing.  The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite. The program was includes coverage of 10 high tech cities since October 28, 2009.  We update our research monthly.  We feature 10 market segments – Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC.  Feel free to visit http://www.wlanalytics.com/wordpress/

Source: WaveLength Market Analytics, LLC, August 2011

So year to date, the tech industry’s job epicenter of the Bay Area fell nearly 21% to post the largest decline.  Boston fell 15% and even fast-growing Austin has been hit with demand off 14%.  On the other hand, while slower-to-recover Atlanta logged the biggest tech jobs demand increase of nearly 6%. San Diego held steady with nearly 1% increase since last January, while other cities posted single digit demand declines.

A summer slowdown for our industry is hardly unusual, so the comparison to last August is important.  Seven of the 10 markets have posted higher demand for tech employees when compared to the same time last year.  The top spot is not really surprising; Dallas, a city in the only US state to actually add jobs during the Great Recession,  tops the list with a 12.2% growth in tech jobs demand.  Other standouts are Seattle and Atlanta.

Source: WaveLength Market Analytics LLC, August 2011

Tech job demand is off most in the low-volatility labor market of Washington DC.  Since Washington DC is a company town for government, it does not grow, nor does it contract quite like other US tech cities. Nonetheless, fiscal pressures will likely increasingly pressure tech job demand.  Demand for tech employees is also lower year-over-year in San Diego and in Raleigh Durham.

Even though recent WaveLength Tech Jobs Index values are trending negative, it’s important to remember where we’ve been.   Since we started collecting data nearly 2 years ago, demand for tech professionals has at least doubled in almost all tech cities.  The laggard, San Diego, has seen strong gains since the Great Recession’s bottom.

Source: WaveLength Market Analytics LLC, August 2011

So hang in there, and watch for the next quarter’s WaveLength Index release.  The last quarter of the year is usually strong for technology buying, and for technology hiring, so it’ll be much more meaningful as to what we can expect for 2012.

Methodology

The number of job postings is collected every Wednesday using well-known job sites and then calculated into a composite per city.  The index contains 6 common functions found in every technology company, including product marketing, product management, application developer, network engineer, sales, and marketing.  The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite. The program was includes coverage of 10 high tech cities since October 28, 2009.  We update our research monthly.  We feature 10 market segments – Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC.  Feel free to visit http://www.wlanalytics.com/wordpress/

Today we release our new study, Five Key Themes in Enterprise Cloud Computing Migration. It discusses the changing Cloud market from a broad perspective and provides probably the first segmentation of what we call the Early Cloud Era.  It introduces the three segments, Pioneers, Planners, and Stragglers and looks at the market through this lens.  Specifically, it examines penetration of different service deployment models, drivers that encourage adoption, and concerns that limit it.  It also looks at enterprise projects before, during, and after Cloud deployment, as well as the role of the different vendors and channel partners in those enterprise IT Cloud computing deployments.

It’s worth saying again that this study reports from a broad perspective.  However, it is by no means exhaustive.  There is always more to say and the right recommendations to make, themselves highly dependent on the audience, the tech segment or the technology or telecom segment.  In other words, the same piece of data can mean something different to a security hardware company.   To that end, if our vast data set may answer a specific question anyone might have, we are happy to take a look.  Just let us know.

Five Key Themes in Enterprise Cloud Computing Migration is a joint effort.  WaveLength conducted the analysis and created the report.  We would like to thank our partner, Winn Technology Group, who did a fantastic job with data collection.  We are also thankful for the contributions from our friends and colleagues at Channel Navigators, LLC and Telecom Strategy Partners LLC.  We’d also like to thank graphics partner Beyond5280, who makes our work artistically shine.

Download the entire report here:  www.wlanalytics.com/Cloud/

Source: WaveLength Market Analytics LLC, May 2011

Austin’s tech job demand growth outstrips every other tech city included in the WaveLength Tech Job Index project.  When Austin’s relatively small size is considered, as it’s what we’d consider a micro tech job market, their demand growth is not only higher, but also more consistent.  Together with 4^th ranking Dallas, there’s clearly a tech job renaissance deep in the heart of Texas.

The “worst” performing market, in terms of demand growth for tech jobs is Washington, DC.  It’s important to consider two key points here.  First, remember that index data collection started in October 2009, very likely near the bottom of the Great Recession. Second, thanks to the presence of the federal government, DC never experienced the fast and hard demand declines the rest of the country endured.  Simply put, demand in DC is more constant and since it didn’t go down as much, so it’s not going up as much, either.

There are a few other noteworthy markets.  The Bay Area- a mega-market along with Washington DC and Boston in its absolute number of jobs- stands out in its pace and consistency of tech jobs demand growth.  Not news, but if the Bay Area does not grow, certainly no other tech city would either.  Seattle also gets a mention for putting up numbers that are close to the Bay Area.  Tech job demand is clearly off-pace in the once-telecom cities of Raleigh-Durham, NC and Denver, CO.  The rest of the markets are hanging in there.

Source: WaveLength Market Analytics LLC

Tech job demand has clearly slowed in recent months in all tech cities.  It’s off most in Washington DC, as fiscal pressure mount.  Boston comes next with a decline of about 15%.  Three cities are still posting positive numbers when compared to values from six months ago.  It’s off least in Austin,which is still strongly positive, followed by San Diego, and Atlanta.

Methodology

The number of job postings is collected every Wednesday using well-known job sites and then calculated into the index for each job function.  The index contains 6 common functions found in every technology company, including product marketing, product management, application developer, network engineer, sales, and marketing.  The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite.  The program includes coverage of 10 high tech cities since October 28, 2009.  We update our research monthly.  It features 10 markets – Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC.  Feel free to visit http://www.wlanalytics.com/wordpress/

Source: WaveLength Market Analytics/Winn, Five Key Themes on Enterprise Cloud Computing

For this reason, Pioneers are less concerned with security, as opposed to Stragglers, where security truly limits their adoption.  As you can see from the table below (click it for a larger view) that combines all the concerns we asked about, it is easily apparent.  The highest ranking for a security concern, which is “Reduced control/visibility for security” is 8^th for Pioneers, tying with “Technology not yet proven.”  This is because Pioneer’s upgrade security prior to their Cloud deployment.  Because of these projects, for Pioneers, all security concerns rank in the bottom half of the list.   For Stragglers, it’s a different story.  Of their concerns, all security concerns we asked about rank in the top half.  After costs, lack of trusted third parties to help them, and the perception that it’s an unproven technology, security concerns are the real barrier for this group.  It all suggests the opportunity for security vendors to develop the market by easing  the fears of the mainstream market.

Since our last report in October 2010, demand has held steady as measured by the overall index.  In the last 6 months, the WaveLength Bay Area Composite gained about 8%, and about 2% since the beginning of 2011 to stand at 286.  Demand for tech positions continues to surpass overall demand for jobs in the general economy.  On average, technology job demand is about 24% higher.  However, in recent months, the gap between tech jobs and all jobs in the Bay Area has started to narrow.

Source: WaveLength Market Analytics, March 2011

As you may recall, we focus on 6 key job functions- and NOT titles- that are integral to every technology company. They are as follows:

• Application development
• Network engineer
• Technology sales
• Technology marketing
• Product management
• Product marketing

Source: WaveLength Market Analytics, March 2011

So what’s noteworthy about this quarter’s update?  It’s clearly the smokin’ advances in demand for application developers!  The March 2011 index value for application developers now stands at a very impressive 466, meaning that demand for them has increased more than 300% since we started the WaveLength Index in the fall of 2009.  Just over the past 3 months, it’s grown 66%. Likely driven by the shift from client-server to cloud computing apps, we can’t help but think this is an indicator of an enormously bullish future for all of us in the technology industry.

So what about the rest of us?  Demand for sales people is actually down from 3 months ago and from 6 months ago.  On the other hand, demand for marketing-related functions is up more than 30% since the beginning of the year.  Overall, it’s logical to expect to see the biggest gains in the areas with the largest declines – and that would be marketing.  Technology companies can get by for some period of time without them, but they can’t do without network engineers or sales people.  This means that, unlike demand for marketing talent, it probably never went down as much for these functions.  However as an increasing tide lifts all boats, the current recovery has certainly increased demand for network engineers and for sales people, although at a moderating pace.

Methodology

The number of job postings is collected every Wednesday using well-known job sites and then calculated into the index for each job function.  The index series is designed to measure monthly changes using a smoothed 4-week average rolled up into an overall composite. The program includes coverage of 10 high tech cities since October 28, 2009.  We update our research monthly.  We feature 10 market segments – Austin, Atlanta, Bay Area, Boston, Dallas, Denver, San Diego, Seattle, Raleigh/Durham, and Washington DC.  Feel free to visit http://www.wlanalytics.com/wordpress/

© 2011 WaveLength Market Analytics LLC. All Rights Reserved.

Wavelength Market Analytics recently partnered with Winn Technology Group to conduct a cloud computing research study.  While many recent studies size the market, we wanted to help our vendor clients better understand to whom they need to sell.  In our study, we sought to understand the differences between organizations that are currently adopting or planning some type of cloud computing solution from those that are not.

Study characteristics:

▫         IT decision-makers to include IT VPs and directors

▫         Sample size = 126 surveys collected summer 2010

▫         Large and medium-sized enterprises

▫         Three distinct buyer groups to include Pioneers who are using or testing a cloud solution, Planners who are actively planning for a cloud solution and Stragglers who have no cloud plans at this time.

▫         Complete results in a full-length presentation and report to be available March 2011.

We found that 41% are Pioneering with their Cloud apps, and another 17% are actively planning for a cloud solution.  A total of 58% are doing something in the cloud, meaning that the majority of participating enterprises have some kind of cloud project.

To find out more, a short summary, Generating Demand: A Summary on Enterprise IT Buying in the Early Cloud Era, is available on SlideShare. You can download it at http://www.slideshare.net/khealy/winn-wl-cloudstudysummaryv22.  The full report will be available the second week of March.

You may also want to participate in our latest Webinar Leveraging Data for Demand Generation Success -Wednesday, February 16, 2011 1:00 PM and find out how you can substantially increase lead rates through data analytics best practices in demand generation campaigns.

Click on this link to REGISTER https://www1.gotomeeting.com/register/404109176