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Pros and Cons: Do-It-Yourself Approaches to Monitoring Shadow IT & Cloud Services

Shadow IT is estimated to be 20-40 percent beyond the traditional IT budget. The ease by which organizations can purchase apps and services from cloud service providers (CSP) contributes significantly to this spending. This is an eye-catching number worthy of investigation—not only to identify and reduce costs, but to discover business risks. So, it is no surprise that CIOs and CFOs have started projects to identify and monitor unknown CSPs.

I often get questions from customers asking if it is possible for IT to monitor cloud service usage and discover shadow IT using existing technologies, and what the pros and cons would be.

The first CSP monitoring approach I am asked about is the use of secure web gateways. A gateway captures and categorizes incoming web traffic and blocks malicious malware. The benefit of this approach is that the gateways are typically already in place. However, there are several limitations in relying exclusively on this approach. Gateways cannot differentiate between a traditional website and a CSP which might be housing business data. They also have no way of discerning whether a given CSP poses a compliance or business risk. Most importantly, to use gateways to track CSPs, IT would need to create and maintain a database of thousands of CSPs, and create a risk profile for each CSP in order to truly understand the specific service being consumed.

The second approach I get asked about is whether organizations can use NetFlow traffic to monitor CSPs. Many customers feel that they can build scripts in a short amount of time to capture usage. Simply answered, yes this can be done. But organizations would face a similar challenge as if they were using web gateways. To capture CSP traffic using NetFlow, IT would need to develop scripts to capture every CSP (numbering in the tens of thousands). Then identify how each CSP is being used, the risk profile of the CSP to an organization, and how much the CSP costs to project overall spend. This is just the beginning. An IT department would then need to build reporting capabilities to access the information as well as continually maintain the database; and apply resources to this undertaking on a monthly basis to ensure the database was current.

The good news, Cisco has done this work for our customers! We have developed Cloud Consumption Services to help organizations identify and reduce shadow IT. Using collection tools in the network, we can discover what cloud services are being used by employees across an entire organization. Cloud Consumption includes a rich database of CSPs and can help customers identify the risk profile of each CSP being accessed, and identify an organization’s overall cloud spend.

Cisco has helped many IT organizations discover their shadow IT. For example, we worked with a large public sector customer in North America who was struggling to embrace the cloud, but were concerned about business risks. Employees were pushing for cloud services to improve productivity when 90% of Internet traffic was blocked by the organization’s policy. Despite these restrictions, 220 cloud providers were being used already and less than 1% were authorized by IT. Leveraging Cloud Consumption Services, the customer was not only able to manage risk, but also authorize future cloud services based on employee needs in a controlled manner.

It is a good practice for every IT organization to understand how employees are using cloud services and monitor usage on an on-going basis. I encourage our customers to determine which approach would work best for their organization; otherwise they may face unknown business risks and costs.

To learn more about avoiding the pitfalls of shadow IT and how you manage cloud services, please register to attend an upcoming webinar on Dec 11, 2014 at 9:00 a.m. PT.

 

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Governing the New Wild West….The World of Many Clouds

ID-10056513In many ways, the race to the cloud resembles the Wild West of the 1800s. The urgency with which business groups are rushing to adopt cloud services, often without IT involvement, resembles the race out to the western US of those looking for gold. With our customer engagements, we have found that there are 5-10 times more cloud applications being used than IT is aware of.

With this rapid rise in shadow IT, organizations are seeing their costs skyrocket as they lose visibility of how much they are spending on cloud services. For example, we worked with a business that discovered it was using well over 600 vendors (and wasn’t aware of 90 percent of them) and spending millions. Shadow IT has been forecasted by CEB to be as high as 40 percent above the IT budget.

The influx of investment in new cloud ventures is also leading to a land grab by cloud service providers, some which are on shaky ground. According to Gartner, only one in four cloud vendors will exist in 2015 due to acquisition or being forced out of business. This leads to risk for organizations that need to ensure continuity of their business applications. Finally, just as the Wild West was filled with dangerous towns and outlaws, cloud services carry business risks if organizations don’t have strong cloud risk and compliance strategies.

Despite this, organizations are keen to brave this new frontier to capitalize on the benefits of cloud. Cloud services help organizations become more agile, reduce costs, and can simplify IT infrastructure. However, to reap these benefits IT teams need a different way of governing the new territory of cloud.

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“Is It Time To Become a Collaboration Technology Broker?”

It’s no coincidence that when choosing where to work, Type A personalities gravitate to organizations at the leading edge of their chosen field or that enable them to make a real difference. But gone are the days when you see “cell phone provided” in a job offer.  I don’t think I’ll choose my next employer based on what collaboration tools they provide, but I will make a point of measuring how seriously they take collaboration and how it fits into their operations. For me it will always be an important selection criterion.

They say “people don’t leave companies, they leave managers.”  I think people leave cultures that hinder them for ones that promise to set them free.

With so many disruptive technologies and deployment options, it can be difficult for IT teams to support broadening and challenging business needs. Increasingly, and often out of frustration around ‘Slow IT’, individual business units are acting as buying centers themselves; creating an issue of ‘shadow IT’.

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#HigherEdThursdays: Changing How IT is Consumed on (and off) Campus

Universities are driving the need for IT consumption-based pricing models more than any other market segment.  This is natural given the unique characteristics of their IT environments.  First off they are at the forefront of the IT consumerization movement driven by new generations of students and work habits. With one fourth of the undergraduate population and half in most graduate programs changing every year, one can easily understand why this is the case. While BYOD has emerged in the enterprises over the past few years it has been a commonplace in higher education since campus networks were built in the 80s.  When public cloud-based applications emerged college students were the first to embrace them and driving some to a prominent position in the industry.  Facebook comes to mind.

It is not just students that make the universities very different than other markets.  On many campuses you find different layers of IT functions and associated decision making.  You have the central IT like all enterprises do.  But then you have some lines of business having their own IT function either at the college or department levels.  Most major research centers have their own IT groups especially if they house a supercomputing facility.  Some grant-funded projects make their own separate decisions on IT services unique for such projects or for very short terms needs.

So what are the pricing models the higher education market is asking for? The answer is of course consumption-based pricing models but the devil is in the details.  A simple subscription style “all-you-can eat” model may not be sufficient in most cases  (and it is not really consumption-based after all, is it?).  We see these in traditional enterprise applications that are converted to a SaaS offer. A utility style “pay-as-you-go” model while provides most flexibility might not have the cost predictability the universities require (remember long distance phone service?). Read More »

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Shining a New Light on Shadow IT

More people than ever are talking about “shadow IT” nowadays.  As the name implies, it’s mysterious, perhaps even malevolent by some people’s standards.  From a traditional IT vantage point, this negative view may be somewhat justified given the risks it creates around security, compliance, productivity, and technology investment.

But let’s look at it from another perspective. Shadow IT is on the rise because more people outside of IT are gaining awareness and access to technology, and harnessing it as a business differentiator. More importantly, many of these people are business leaders with growing budgets that align to their priorities. Here’s how much technology budget growth business leaders expect in the next year:

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Over the next year how will your group’s technology budget change 

Source: Cisco Business and IT Priority Survey results Read More »

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