The Hidden Side of the New User-Empowered Paradigm in Cloud Computing

Ever hear of Shadow IT? You should, you and your staff practice it. Surprised? Don’t be – in fact, everybody is doing it. Even the IT people go around their own IT department. Also known as Stealth IT or Rogue IT, here is a good definition:

Shadow IT is hardware or software within an enterprise that is not supported by the organization’s central IT department. Although the label itself is neutral, the term often carries a negative connotation because it implies that the IT department has not approved the technology or doesn’t even know that employees are using it. (Courtesy of WhatIs.com)

Until about eight years ago Shadow IT were largely “skunk works” projects of hardware and software done in a department or perhaps a region. Usually, these arose because of the desire to “not wait for IT” to fulfill a functional department, region or location’s needs. It was a pain to the IT folks but really it was more like a drop in the bucket than a torrent.

But in 2006 things changed. Amazon launched Amazon Web Services (AWS) and gave birth to the world of cloud computing. Two trends quickly emerged. First, any developer could whip up applications for any user quickly and inexpensively. Forget the IT department’s resources and approval.

Second, packaged application services sprung up built upon AWS and other cloud platforms. Now business users didn’t even need a developer; they could just buy a software solution as a service and pay for only what they used. Need a collaboration tool to share files everyone could work on – sign up for Drop Box. Want to have a chat? Use MSN Instant Messenger. Tired of your company’s clunky sales management software – let’s get some Salesforce.com licenses for our division.

Users became empowered – just as consumer applications on their smartphones and tablets were simple to understand and operate; now the same usability came to their work place. Called Software as a Service (SaaS), they were straightforward to understand and use. They were cheap. Many times they were free. And much of this took place silently and incrementally. There was something very large and disruptive growing in the Shadows.

How big? Well, most IT executives believed this was a minor brushfire and they had a good handle on it. Some surveys had CIO’s saying there might be nine to twelve of these SaaS solutions running around the company. Others said maybe a score or more.

Well reality turns out to be very different. Consider this from a recent quarterly sweep from Netskope (based on tens of billions of cloud app events seen across millions of users).

• Organizations have 579 cloud apps in use on average, 88.7% of which aren’t enterprise-ready. This is big and BTW, your precious corporate data is wide open to hackers.
• 21 percent of data uploaded to cloud business intelligence apps are in apps whose terms say the app vendor (not you) owns the data. Sorry, You no longer even own your key company information.

How many do you think your organization is running?

Have you thought about how much this costs? Gartner recently estimated that 38% of a company’s IT spend is already outside of the IT function’s budget and by 2017, that’ll jump to 50%. Your IT spend it approaching 2x what you thought it was.

What about the security of your data and compliance issues? A recent study shows that the increasing use of shadow cloud services can triple the probability of an average firm having a data breach costing at least $20 million.

What’s lurking in the shadows in your firm? It’s probably time to shine some light into this so you can see what is really going on. After all, you don’t want to find out the hard way after the damage is done.

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