Shortening the length of shadow IT creates IT services opportunity

Posted by Mike Vizard on Aug 13, 2015 11:25:00 AM

Saving moneyThe latest report from Cisco, based on actual usage of cloud services among its customers, finds that most IT organizations are consuming as much as 15 times more cloud services than the internal IT organization realizes. That suggests that a significant new opportunity is now emerging for IT services firms to drive consolidation of those shadow IT services.

The Cisco report finds that on average the internal IT department thinks there are 51 cloud services being used by its organization, while interviews with individuals at said organizations prove there are on average over 730 in use.

Internal IT unaware of cloud usage 

A similar report published late last year by Skyhigh Networks, a provider of cloud monitoring and management tools, painted an even worse picture. While the majority of cloud data generated by organizations is finding its way into just 11 cloud services, the paradox is that the number of cloud services actually being used has increased from 738 to 831. The report also found that 71 percent of IT pros are unaware of the amount of cloud use inside their organizations.

Overall, the Skyhigh Networks report finds that enterprise organizations were on average making use of 738 consumer and enterprise-grade cloud services, which is anywhere from 10 to 20 times more that the internal IT organization thought there are.

While usages of shadow IT services can probably never be contained completely, the Skyhigh Networks report did find that those organizations that did consolidate the cloud services in use not only became more secure, but they saved on average over a half million dollars.

Consolidating cloud services in use

Similarly, Cisco estimates that organizations are spending four to eight times more than they need to on shadow IT services. By balancing how those cloud services are delivered under the management of the internal IT organization, Cisco projects that organizations could reduce their shadow IT costs an average of 15 percent, while substantially reducing their security and compliance risk exposure.

Naturally, most IT organizations don’t know exactly what cloud services are in use because they were contracted directly by individuals working within the organization without any help or intervention on the part of the IT organization. The resulting issue not only speaks to security and compliance concerns,  it’s more than likely that most organizations are paying top dollar to use cloud services that in more than a few cases are redundant to one another in terms of the functionality they provide.

Minimizing IT costs 

Cisco has conducted its survey multiple times now. A year ago the difference between IT awareness of cloud service usage was a factor of seven. Six months ago it was a factor of 10. At this rate, Cisco is projecting that by the end of this calendar year it will be a factor of 20 with more than 1,000 external cloud services in use per company.

The first place those internal IT organizations are obviously going to need help is simply discovering what cloud services are actually in use. The hard part is pulling together the politics inside the organization needed to drive the actual consolidation of those services. But as most IT service providers already well know, there’s nothing quite like showing senior business executives how their organization is wasting large sums of money to create a mandate for change.

Photo Credit: Kristina Zuidema on Flickr. Used under CC 2.0 license.

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Topics: IT Services Trends

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