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Shadow IT cited as reason why some firms lack formal cloud strategy

Research from VMTurbo suggests firms are using cloud, even if they claim not to have a formal private or public deployment plan in place

The emergence of shadow IT deployments has been cited as a major reason why more than half of companies claim not to have a formal cloud strategy in place.

According to research carried out by cloud application performance firm VMTurbo, featuring responses from just over 1,370 organisations, 35% of firms have no formal private cloud strategy, while 27% have no public cloud plans.

Speaking to Computer Weekly, CTO of VMTurbo Charles Crouchman said many of these firms are using cloud in some form, despite what the results might suggest.

“Their use of cloud wasn’t based on a strategy, but on individuals being able to use a credit card to get into the public cloud,” he said.

“What’s happening now is the IT organisation is realising it needs to get a formal arrangement in place to manage this, as people are using the public cloud without the approval of internal IT.”

Working through this process can often end up being an eye-opening experience for IT departments, as the individual costs of these unauthorised cloud deployments soon start to mount up, he added.

The unexpected cost of using cloud was also touched on elsewhere in the research, as its findings suggest small to medium-sized enterprises (SMEs) in particular are underestimating the financial impact of using off-premise services.

For example, respondents planning private cloud builds said they set aside an average budget of $149,605 to cover the cost of their activities, while those that have successfully completed the deployment of such an environment ended up paying more than six times that much ($898,508).

Read more about cloud adoption trends

In Crouchman’s experience, though, underestimating the cost of cloud is not a trait SMEs are alone in being guilty of.

“When I talk to the CIOs of very large enterprises, they have the same problem. The public perception of the cost of using public cloud is that it is very low, and that the public cloud providers can deliver infrastructure at a cost much lower than what you could do yourself,” he added.

“The reality is that people are getting bill shock when they finally get their bill from the providers, because the cost of using the services are much higher than anticipated.”

The company embarked on the study to gain a better understanding of how businesses are adopting cloud technologies and whether they are reaping the full benefits of using off-premise IT, said Crouchman.

“Every supplier in the infrastructure space is trying to understand the path and transformation from private compute resources to private cloud, public cloud, hybrid cloud and multi-cloud,” Crouchman told Computer Weekly.

“We all know we’re on this road, but we want to understand the drivers for these different companies to adopt cloud computing – whether that’s public or private or both.”

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