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As the number of workloads shifting to the cloud continues to accelerate, one of the biggest limitations in terms of the addressable market for managed service providers (MSPs) is now the salaries of the IT professionals that have the expertise required to manage those environments.

A survey of 778 IT professionals conducted by O’Reilly, a provider of IT education curricula, finds the average cloud professional now commands an average salary of $182,000, with the average salary increase being 4.3 percent in the last year. Only 19 percent of respondents didn’t report any change in salary during the past year.

Salaries vary by geography, age, gender, and employment status

The highest-paid job titles include directors ($235,000) and executives ($231,000), followed by architects, “leads,” and managers at $196,000, $190,000, and $188,000, respectively.

Average compensation is highest in California ($214,000), followed by New York ($212,000) and Washington ($203,000). Respondents between the ages of 45 and 54 had the highest average salary at $196,000. The average salary for women is 7 percent lower than the average salary for men.

Nearly two-thirds (63 percent) of respondents work completely remote full-time, with 31 percent following a hybrid schedule that requires them to report to the office one to four days a week. The survey also discovered that hybrid work was associated with higher overall salaries, with the average reported salary for hybrid staff being $188,000. Full time remote workers made slightly less at $184,000, while full-time in-office workers reported the lowest average salary at $131,000.

Expensive IT talent presents a challenge for MSPs

Nearly half (48 percent) of respondents participated in technical training or certification programs in the last year, with 18 percent of respondents obtaining one or more certifications. Respondents cited learning new technologies (42 percent), improving existing skills (40 percent), and working on more interesting projects (21 percent) as the most popular reasons for participating in learning and development.

However, only 4 percent of respondents reported job security is an issue, so enticing IT professionals away from their current position is not easy. MSPs have one advantage when it comes to recruiting IT talent. The typical MSP supports a range of clients that typically deploy any number of classes or workloads that IT professionals are likely to find interesting and challenging. The issue, of course, is MSPs can’t afford to throw expensive IT talent at every challenge.

Balancing labor costs with technology advances

Savvy MSPs, of course, are trying to strike a balance between the cost of IT labor and advances in automation that can reduce costs. Many MSPs are at the forefront of adopting best-in-class DevOps practices to automate as many tasks as possible. Advances in artificial intelligence (AI) should continue to lower the cost of IT operations in the months and years ahead. That’s critical because the total number of workloads any MSP can manage today, is constrained by the total number of IT professionals with cloud expertise that MSPs can find and retain. In fact, it’s not unheard of for MSPs to try and poach IT talent from one another. The issue that creates is it only serves to increase the total of IT for MSPs as salaries continue to rise.

It remains to be seen how the economic downturn will impact salaries. There may be fewer companies clamoring for cloud expertise soon, but it’s a possibility that the downturn will only accelerate the rate at which workloads have been moving to the cloud. Most MSPs should continue to invest in automation on the assumption the latter scenario is going to be the more likely scenario.

Photo: Jirsak / Shutterstock

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Mike Vizard

Posted by Mike Vizard

Mike Vizard has covered IT for more than 25 years, and has edited or contributed to a number of tech publications including InfoWorld, eWeek, CRN, Baseline, ComputerWorld, TMCNet, and Digital Review. He currently blogs for IT Business Edge and contributes to CIOinsight, The Channel Insider, Programmableweb and Slashdot. Mike blogs about emerging cloud technology for Smarter MSP.

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