CXO

Cloud survey reveals 61% of business units use shadow IT

A 2nd Watch cloud survey revealed a surprisingly high percentage of shadow IT amongst respondents. 2nd Watch's Matt Gerber discusses what central IT can do to try to reverse this trend.

 

cloud_021414.jpg
 

In a recent survey conducted by 2nd Watch, 93 percent of enterprise business units are using the cloud, while a substantial 61 percent of them are bypassing their IT departments and doing it themselves.

2nd Watch, a cloud IT operations firm and Amazon Web Services (AWS) partner, released its 2013 Cloud Adoption Rate survey in January 2014. Matt Gerber, 2nd Watch's EVP Sales and Marketing, said in our interview that the survey, which involved 133 companies, was originally intended for internal purposes.

2nd Watch was trying to understand client needs better, and was surprised by the amount of "shadow IT" the survey revealed: 61 percent of business units circumventing their own IT shops and going directly to the cloud. The ease and agility of the cloud, along with the limited resources IT departments suffer from, are working to make this a reality.

In the cloud adoption survey, the challenges faced by IT to deliver cloud services include: a lack of staff or finances, 22 percent; concerns about security, 16 percent; and a lack of corporate standards, 12 percent.

2nd Watch conducted the survey in December 2013 via an independent online service. All 133 respondents were in U.S.-based companies ranging from fewer than 200 employees to more than 10,000, and had titles including CIO, EVP, and IT manager. The largest number of companies, 37 percent, were in the high tech industry.

To gain more insights into the survey and its implications for enterprise use of the cloud, TechRepublic spoke with 2nd Watch's Matt Gerber.

Key takeaways:

  • 2nd Watch at first believed provisioning workloads in AWS would be the priority for their clients.
  • After the survey, they concluded that governance and compliance needed to be the focus.
  • The company believed that not enough people were thinking about shadow IT, nor knew how to govern it.
  • Agility and ease of use with the cloud, along with a lack of resources for central IT, are what is driving business units to make their own deployments.
  • IT can bring business units back into a corporate framework by creating a brokerage or "services catalog."
  • Gerber agrees that the goal is to "govern and secure cloud offerings" and not chase shadow IT.
  • 2nd Watch Atlas helps clients create, deploy, and monitor cloud architectures; its Insight offering helps to manage cost and billing with AWS.
  • Matt Gerber sees an ongoing need for clients to figure how to consume cloud services effectively, and expects to do more surveys.
  • Over the last six to nine months, the company has seen enterprise interest in cloud adoption increase.

At the beginning of our talk, Matt Gerber described how the Cloud Adoption Rate survey was at first an internal effort to clarify their understanding of what their enterprise clients needed to improve use of the cloud.

Matt Gerber: To give you some background on why we did it, we were trying to get a sense of what stage of adoption our customers were at. Part of what we do as a company, we build out products that help them migrate and manage workloads in AWS. There's a sequence of working through our road map on what's more important, and we were initially thinking that provisioning workloads in AWS was the first priority as part of our 2nd Watch Insight and Atlas products.

Thinking that would be next on the road map when we did the survey, it really blew our hair back (for lack of a better way of describing it) and forced us to change direction with that product road map. We were thinking if there's that much shadow IT out there, the bigger issue the CIO has is how to get that stuff under control. Governance and compliance for existing workloads was where we shifted our focus to, and as a result that's what we're introducing with Atlas. It's a pretty big shift for us.

TechRepublic: What led you to release the survey results publicly?

Matt Gerber: It was such an eye-opener that we felt we would share it, but the self-interest on our part is we don't think enough people are thinking and talking about the issue. And being able to go into and speak with a CIO and say, hey, we got a platform and a suite of products that allow you to get shadow IT with the cloud under control—we felt that would work in our favor. So between sort of saying, hey this is an eye-opener for the world out there and our self interest, we decided to release it.

TechRepublic: You are quoted in a CIO.com article saying that the amount of shadow IT that the survey uncovered was the biggest surprise for you. 93 percent of enterprise business units in the survey use the cloud, but then 61 percent of them bypass central IT. That to me is a huge gap. Why is it so large?

Matt Gerber: It was a shocking number of business units using the cloud and a shockingly small percentage of those workloads and applications that were being supported by the central IT department. We think it's happening because it's so easy now for a business unit to provision a workload in the cloud, and we see this a lot with our customer base.

A real-world example: we've got a customer with a North American marketing business unit. They work with a bunch of agencies for their campaigns. And they've said they've given up on central IT being able to respond as quickly as they need. They're now going to this stutter-type approach where they launch a site, keep it up and running for two weeks, pull it down, and launch another site. And central IT's inability to react that fast has driven them to provision this stuff outside of the corporate IT network.

Our sense is that it's the agility these end-users want that is driving them to this shadow IT world. And IT's inability to react either quickly enough, or with the right resources, or a combination of all the above, has put them in the position of not being able to support the business requirements. The business unit is doing what it thinks is the right thing to do, but outside of the corporate governance and compliance framework.

TechRepublic: There was a comment regarding shadow IT in the CIO.com article about your survey: "First, the goal is not to control shadow IT, as that is a service that the IT department will never have ample cycles to provide. The goal is to govern and secure cloud offerings." They add that, "Chasing shadow IT rarely works," and that you will "get more flies with honey." In other words, give them a reason to come to you, add value, and they will be more likely to show up. What's your reaction, and how can central IT do that?

Matt Gerber: I think that's absolutely right. And if you go back to the reasons the business units are doing it, it's for legitimate reasons. They want to be more agile, they want to be more competitive, and they want to serve customers better. And you can't, as a central organization, tell them they can't do that.

What you have to do is find a way to enable them to do that, and what we're doing with our customers is trying to get their central IT shop to a point where they have what we would call a "services catalog." And so once they've established a catalog for cloud services, they can simply pass it on to the business units and say, hey, here's everything you need to provision it, turn it on, turn it off, do what you want, spend what you want, because I am now giving you what you need in an on-demand model, and you control it.

Central IT doesn't control it. All central IT is doing is saying, here's a menu. And as long as you're ordering off the central menu, and if the menu is the right menu, then have at it. You do whatever you want to do from a business perspective. Spend your money—but at least what I've given you on that menu complies with a corporate governance standard, complies with corporate security standards, and complies with corporate standards for how you purchase this stuff.

So I think the comment is spot on, and I think central IT needs to change its organization, and change how it serves up cloud services in order to be successful.

TechRepublic: Tell me about your Atlas product offering.

Matt Gerber: Atlas is a product that we have in beta right now, and it will be generally available in May.

It's a platform that does a couple of things for you. It allows you to build a library of AWS reference architectures, and then very easily deploy those reference architectures and visually see what they're doing. Then for each of those architectures, it allows you to establish a cost projection and capture actuals.

So it's a tool that central IT or a business unit can use to establish what we just talked about, which is—here's a library, or menu, of reference architectures, that are corporate-sanctioned, here's how you deploy them and deploy them easily, and then here's how you monitor and manage them from a cost and run-it standpoint.

TechRepublic: 2nd Watch has another offering called Insight.

Matt Gerber: Insight is part of Atlas; we do offer it separately, and it's part of our managed services. It's a piece of software that allows an enterprise to monitor individual AWS workloads, and associate costs with those, so you can internally handle costing and chargebacks.

TechRepublic: We are sort of in a mode where sharing quality information gets people's attention. At this point, do you feel any encouragement to do further surveys? They are time-consuming and costly, but can be beneficial from a marketing standpoint. Are you planning to do more surveys in the future?

Matt Gerber: Absolutely. We've seen the results of this one, without a doubt.

In terms of what we see evolving, there is a real need for the enterprise organizations that we serve to figure out how to consume cloud services, and consume them effectively. And if you're in a central IT organization, how to serve them up to the business unit.

And so it's pretty safe to say, within that sort of sandbox, we are going to keep surveying people for information about what they're challenged with, what they need us to do as a vendor, in order to step up and help deliver solutions for that issue.

Toward the end of our talk, Matt Gerber added that: We have seen as a business a significant pickup in interest in adoption of cloud, and specifically Amazon Web Services, by the enterprise. And that's happened in the last six to nine months. What I see is that the questions that we hear have changed dramatically from "is it secure, is it safe, is it reliable?" questions, to "how do we do this?" And we're getting engaged with a lot of enterprises around the country on exactly how they migrate and manage workloads.

TechRepublic: Can you describe that rise in interest, or perhaps give a percentage?

Matt Gerber: Probably the best way to describe it to you is, I would say, in the last six months we have entered into agreements to migrate at a minimum one workload, and in some cases 40 to 60 workloads with at least 10 Fortune 500 companies.

More about 2nd Watch

In October 2013, 2nd Watch concluded a $23 million funding round led by Columbia Capital, with participation from Madrona Venture Group. Matt Gerber shared the two main goals of the capital influx. The first is to extend its presence nationwide, expanding its Seattle and New York offices, and opening offices in southern California, Texas, and Atlanta. The second goal is to develop its product offerings to further enable use of AWS by the enterprise.

 

About

Brian Taylor is a contributing writer for TechRepublic. He covers the tech trends, solutions, risks, and research that IT leaders need to know about, from startups to the enterprise. Technology is creating a new world, and he loves to report on it.

Editor's Picks