Global Analyst Insights by Rene Buest

How to solve shadow IT and covered clouds #tsy13

By on November 11, 2013 in Analysis

The shadow IT or as VMware calls it, Covered Clouds (hidden used cloud services) are a major problem for businesses. According to a VMware study 37 percent of Europe’s leading IT decision makers suggest in their companies not covered expenses for cloud services. 58 percent of European knowledge workers would use unauthorized cloud services.

Pros and cons of shadow IT (Covered Clouds)

This unauthorized use has also its financial influences. In the affected companies, executives in the IT area believe that an average of 1.6 million euros will be spent without the permission of the company. This represents on average 15 percent of the annual IT budget of these companies.

However, this development is considered to be positive by many. 72 percent of IT managers see this as a benefit for their company. Because 31 percent of these are of the opinion that shadow IT and Covered Clouds accelerate growth and innovation. More than half reported that the company can thus respond more quickly to customer requirements.

However, there are major security concerns. Of those who do not advocate shadow IT, more than half feared a tightening of security risks. This insights VMware gave during the T-Systems Symposium 2013 in Dusseldorf.

A method: IT-as-a-Service

IT-as-a-Service is a business model in which the IT department is managed as a separate business unit and developed even products and services for the own company. Here, the IT department competes against external providers. Finally, at the present, departments have a limitless selection of other vendors in the market.

VMware has ​​it made to its mission to provide IT departments the technical means for this and sees IT-as-a-Service as a chance to balance the ratio of maintenance to innovation at 50:50 instead of investing the majority of the expenses in the maintenance. Today the ratio is about 80 percent (maintenance) to 20 percent (innovation).

VMware is right trying to establish itself as a leading provider of IT-as-a-Service solutions. As one of the few infrastructure providers on the market and with their abilities, they are able to provide the technical means for this turnaround in the enterprise. However, one must note, that IT-as-a-Service is not a technical approach, but must be anchored firmly in the minds of IT departments in order to be successfully implemented. Therefore, VMware can only show the technical means that are available to initiate the change.

Service portal as middleware for employees

IT-as-a-Service is not the ne plus ultra solution for the shadow IT, but may help to counteract this over the years grown phenomenon. The relevant concepts and technologies are available and need to be implemented.

Is an IT-as-a-Service philosophy emerged within the IT department, it should be started to establish an own service portal for employees, which controls the access to internal and external cloud services. This can be either used for infrastructure (virtual servers and storage) or software and platforms. The IT department becomes more and more a service broker and is able to ensure, through the use of external resources (hybrid model), that the employees can expect a high quality service. Thus, for example, a server can be provided to a developer within five minutes instead of several weeks. It should also be considered that developers are not only interested in computing power and memory but also need services to develop their own applications and services in a simpler way. This can be accomplished, among others, with the characteristics of a Platform-as-a-Service (PaaS).

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About the Author

About the Author: Rene Buest is Gartner Analyst covering Infrastructure Services & Digital Operations. Prior to that he was Director of Technology Research at Arago, Senior Analyst and Cloud Practice Lead at Crisp Research, Principal Analyst at New Age Disruption and member of the worldwide Gigaom Research Analyst Network. Rene is considered as top cloud computing analyst in Germany and one of the worldwide top analysts in this area. In addition, he is one of the world’s top cloud computing influencers and belongs to the top 100 cloud computing experts on Twitter and Google+. Since the mid-90s he is focused on the strategic use of information technology in businesses and the IT impact on our society as well as disruptive technologies. Rene Buest is the author of numerous professional technology articles. He regularly writes for well-known IT publications like Computerwoche, CIO Magazin, LANline as well as Silicon.de and is cited in German and international media – including New York Times, Forbes Magazin, Handelsblatt, Frankfurter Allgemeine Zeitung, Wirtschaftswoche, Computerwoche, CIO, Manager Magazin and Harvard Business Manager. Furthermore Rene Buest is speaker and participant of experts rounds. He is founder of CloudUser.de and writes about cloud computing, IT infrastructure, technologies, management and strategies. He holds a diploma in computer engineering from the Hochschule Bremen (Dipl.-Informatiker (FH)) as well as a M.Sc. in IT-Management and Information Systems from the FHDW Paderborn. .

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