Engineers and operations people are complementary goods to datacenters
There is a common perception that “cloud” computing will make operations people unnecessary. The reality is the opposite, I would expect the demand and price for operations people to rise on the whole. It is easy to see why: the final product of “cloud”-style data center operations and software engineering is a website or service. Insofar as “cloud” computing is successful it will lower the cost of running a data center by removing direct interaction with lower-level infrastructure. When the price of making and running websites and service goes down you expect more of them (i.e. demand goes up). This means the demand/price for anything else needed to run a website goes up to. It turns out the other thing you need to run a web service is engineers and operations people. This is what is known as a complementary good (see the wonderfully readable textbook Principles of Economics if you are interested in this kind of thing).
But all operations people are not created equal. Some are actually being automated. Certain lower-level systems tasks are being replaced. The people who build out servers, data centers and networks are being replaced by centralized teams run by Amazon. The interaction with these things is now via an API.
So systems operations will be impacted, but by no means replaced. You still absolutely need a networking expert if you run on Amazon you just no longer need to build out networks on your own. The result of this is that I expect most operations people in those areas to move up the stack.
One other impact is that because many services like machine allocation that used to be manual are now behind APIs, I expect the importance of programming for operations people to increase. So if you are an application operations specialist and want to future proof your skills, make sure you are a solid python programmer.
Credit to Eric Sammer for reminding me of this.