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Private Cloud: Keeping Corporate IT Relevant – Part 1 – The Challenge
Dick Csaplar, Aberdeen Group
SEP 26, 2013 05:03 AM
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In June 2013, Aberdeen surveyed 103 organizations to discover how companies deploy and manage Private Clouds. In this first blog we will focus on how Corporate IT is being challenged by both the Public Cloud and shadow IT in competing for limited corporate funding for computing services. In the second blog we will see how IT is meeting the increasing demands of their end-users, gaining better control, and lowering costs for IT services by using Private Cloud tools.

Today, corporate employees have an alternative to old school IT infrastructures. Rather than solely depending on their IT departments for computing services, they can go outside the company and contract directly for Cloud applications and services, completely bypassing the in-house IT department. How can Corporate IT combat this trend? The Entire report can be read here “Private Clouds: Keeping Corporate IT Relevant.”

The IT Challenge — Rising End-User Demands

Those who have been in business for many years know how the “old” IT system worked. You had to wait weeks before new applications became a reality, and IT expenses were a straight allocation that were added to a department P&L with little explanation or ability to change the amount.

IT Relevant 1

Public Cloud providers have provided an alternative to that model. Anyone with a credit card can gain access to an application deployed in the Cloud, often within one day. Customers know in advance what they will pay and they are charged only for their actual usage.

As shown in Figure 1, applications such as CRM (Customer Relationship Management), HR (Human Resources), and email are now commonly deployed in the Public Cloud, either as a SaaS (Software-as-a-Service) application or as IaaS (Infrastructure-as-a-Service). Using the Public Cloud for corporate applications is perfectly fine, as long as it has been planned and approved by senior management. The worst situation is if a departmental manager decides to implement their own application, does not inform senior management and, using a credit card, spins up their own version of an application and populates it with corporate data. This is called “Shadow IT.”

Shadow IT

Shadow IT is a term often used to describe solutions built and used inside an organization without official organizational approval. An example of Shadow IT is shown in Table 1, where a full third of respondents to a survey on storage admitted to using their own personal Public Cloud destination to store corporate files.

IT Relevant 2

With wide spread adoption of Public Cloud, corporate IT is threatened with lower levels of relevancy. If applications are outsourced to the Public Cloud or end-users develop workarounds, corporate IT can lose part of its budget and potentially, part of its headcount. Also, when employees deploy Shadow IT the entire company can be damaged, as important data can be mishandled. So how does Corporate IT fight these trends? They do so by providing their end-users services as good or better than those they can get from third parties.

Another way that IT can learn from Shadow IT is to look at the ways that users are accessing shadow resources and what types of shadow resources are being used. This goes beyond just virtual cloud-based server resources. It could be something as simple as using a Gmail calendar account for all of their business calendaring, instead of the service provided by IT. The point is that IT can learn about the features they need to implement by investigating the types of services that users deploy out of policy.

This is the concept of Private Cloud and, if implemented correctly can transform corporate IT from being “obstructers of progress” to true corporate business partners. In the next blog – Private Cloud: Keeping IT Relevant – Part 2 – The Answer we will look at how companies are using tools originally designed for the Public Cloud to lower their cost of computing and give end users more direct control of their IT services and finances.

Dick Csaplar

Senior Research Analyst, Virtualization and the Cloud

IT Infrastructure Group

Aberdeen Group

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