Are there covert clouds hiding in your business?

April 7, 2014
Are there covert clouds hiding in your business?

Over the last couple of years, there have been increasing rumours and admissions about IT spending which by-passes the IT function completely. Office workers are becoming frustrated with outdated IT tools and processes, and are taking matters into their own hands by purchasing cloud services themselves.

We know it’s going on and CIOs of our customers know it’s going on, so we wanted to investigate:

  • the extent of the issue
  • how it was perceived by ITDMs
  • the impact it is having

 We commissioned research house, Vanson Bourne, to survey 1,500 senior IT decision makers and 3,000 employees across Europe to find out exactly what was happening.

One of the most interesting trends that we noticed was that many businesses are actually embracing this trend as they know its fuelling innovation and boosting growth. While covert clouds can present additional issues for IT team, it’s great to see that businesses are recognising the benefits that external cloud services can deliver.

Taking a closer look at the figures, the research has helped to quantify just how far reaching these covert clouds actually are. In Europe, 37% of IT decision makers think their staff have bought cloud services outside of the IT department, without getting the necessary permission. However, in firms where this has happened, nearly three-quarters of IT managers think that these ‘covert clouds’ can actually be beneficial to the business. The particularly interesting aspects of this are the reasons given for how external clouds can help a business. For example, almost a third of IT managers said covert cloud spending can support business growth and innovation, and 38% said it allows them to respond faster to client demands. Tellingly, the research also highlights the fact that covert clouds are sometimes necessary to provide a solution that the ‘official’ IT department can’t – this was something over half of our respondents flagged.

Although the benefits of covert clouds are clear, they can add another layer of complexity to the IT team’s struggle to manage security within a business. With these clouds hosted outside of corporate boundaries, 48% of IT managers in Europe expressed concern that off-radar cloud spend escalates security risks. This can then lead to a conflict between departments who want IT flexibility, and IT teams needing to maintain control to ensure compliance with security policies.

The research also highlights a hidden aspect of covert clouds – the cost factor. For the whole of 2012, the average spend on covert clouds was nearly €1.6million per affected business. Where office workers have bought cloud services in 2012, this equates to €2,270 per worker each throughout Europe. Italy, Germany and the Netherlands had the most prolific off-radar cloud spenders: 22% of Italians spent more than €5,000, followed by 19% of Dutch people and 17% of Germans.

The results of the survey provide invaluable insight into the extent to which external clouds are influencing corporate IT infrastructure. We’ll be bringing additional insight on the blog from Joe Baguley, VMware’s chief cloud technologist for EMEA, discussing what this research means for businesses, and how they can successfully manage the issues around covert clouds.

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