Shadow IT Archives - Everest Group

Why Shadow IT is the Next Looming Cybersecurity Threat | In the News

April 25, 2019

Shadow IT is an issue that just about every organization faces on some level, but when I speak to executives and IT leaders, it’s simply not a topic that comes up. When I do bring it up, it quickly becomes clear that the tech industry as a whole underestimates the size and scope of the issue. And that lack of awareness and understanding is posing an ever-increasing threat to data protection and cybersecurity.

Some executives I speak with haven’t even heard the term “shadow IT,” which refers to systems, software, or applications that individuals in an organization use on a regular basis without the knowledge of executive leadership or the IT department. And when I tell them that recent research by the Everest Group found that upwards of 50 percent of technology spend in organizations lurks in the shadows, I can see their jaws drop. This means that half their budgets are being spent on software that teams, groups, and business units are purchasing (and using) without the IT department’s knowledge.

Rogue, stealth, shadow: The antiheroes of IT | In the News

April 23, 2019

In a dark, gloomy and quiet corner of the office, behind cupped hands, the hushed words are spoken for fear that anyone else should hear: “Shhh, don’t say it out loud, but we’ve got a case of shadow IT.”

The relentless drip of technology that’s not been approved by IT seeping into the organisation is unlikely to slow down. It all started when Michael in accounting realised that he could do things a lot easier with a publically available app he’d found in the Play Store, rather than using the cumbersome beast approved by IT. Now, from the high-level executive down to Susan in legal, everyone has a mobile device loaded with applications that make their lives easier. Unfortunately, many of these pose a significant security risk to the business.

It’s not just limited to free apps either. Between both Gartner and Everest Group, their research found that anything from 30% to 50% of enterprise spend is linked to shadow IT. And both think this is likely not even close to the truth. The reality is that shadow tech is simple, accessible, cost-effective and quick. It doesn’t labour under the complex security and red-tape restrictions that often hamper approved applications. And, let’s face it, many of the apps and solutions provided by organisations are difficult to use, bloated and chosen by management, not by the users.

Rogue, Stealth, Shadow: The Antiheroes of IT | In the News

March 27, 2019

The names that define the illicit hardware and software introduced into the organisation are uncannily accurate, but can be turned into a business benefit.

It’s not just limited to free apps either. Between both Gartner and Everest Group, their research found that anything from 30% to 50% of enterprise spend is linked to shadow IT. And both think this is likely not even close to the truth. The reality is that shadow tech is simple, accessible, cost-effective and quick. It doesn’t labour under the complex security and red tape restrictions that oft en hamper approved applications. And, let’s face it, many of the apps and solutions provided by organisations are difficult to use, bloated and chosen by management, not by the users.

Huge Unaddressed IT Market for Service Providers | Sherpas in Blue Shirts

April 19, 2017

In a world where sales for IT services have been decelerating, we believe there is a $400 billion unaddressed market for IT services. A huge, attractive prize for service providers. But it requires a different business model. This blog post describes the situation.

The Market is Shadow IT

The unaddressed market is enterprise shadow IT. By shadow IT, I mean spending on IT that doesn’t go through the enterprise IT shared services function.

Why? Because IT is too slow in responding business users’ demands for new functionalities and capabilities and is not aligned with the business needs.

Shadow IT exists not only because business users are taking the matter into their own hands but also because there are companies that are successfully serving business users’ need for quick access to functionality and capability. Who is successfully serving shadow IT? AWS is one of them, and it’s a $17.5 billion business. Rackspace also serves the shadow IT market. So do Google and Microsoft Azure along with all SaaS companies. And many small local contractors are brought in to run quick app development or maintenance projects and PC support. These are just a few examples to illustrate that there’s a big, alternative shadow ecosystem operating in parallel to enterprise IT.

What is the basis for my assessment of the market size? Let’s do the math:

The overall IT services market it about $1 trillion
Gartner studies size shadow IT as 40 percent of total IT spend

This results in a $400 billion shadow IT marketplace that is currently largely unaddressed by service providers. The market may be even larger, as our Everest Group research finds shadow IT is at least 50 percent of enterprise total IT spend.

How Can Service Providers Address the Shadow IT Market?

Currently, providers sell infrastructure or apps services into the enterprise IT group. That model won’t work in addressing shadow IT. Can it be done? Yes. AWS is doing it. SaaS companies are doing it. Service providers can do it, but they must deploy a different business model than they currently use. In service providers’ current model, value is associated with IT functions and delivering the lowest cost per unit for those functions. It’s the same problem enterprise IT has, as value for business users is now speed in acquiring functionalities and capabilities that meet business needs.

My advice is to deploy a DevOps model and create an integrated pod with a cloud stack and cross-functional teams that are placed into the various business departments to address their needs. Third-party service providers leveraging the DevOps model and cross-functional teams in business departments will be well positioned to capture a significant share of the huge shadow IT market.

How to Eliminate Enterprise Shadow IT | Sherpas in Blue Shirts

April 11, 2017

Gartner studies have found that shadow IT is 30 to 40 percent of IT spending in large enterprises, and our research at Everest Group finds it comprises 50 percent or more. Either way, I believe these statistics are an understatement of the shadow IT ecosystem — spending on IT that doesn’t go through the sanctioned enterprise IT shared service function. It’s a big issue, and increasingly complicated. Historically, the increase in complexities, the need for greater security or the need to operate at enterprise-wide scale drove shadow IT out of departments and into the administration of the IT group. That’s no longer the case; thanks to SaaS and cloud products/services, shadow IT can now operate securely at scale. So how can a CIO address the risks and expense of shadow IT?

Users subscribe to many IT services that don’t go through the enterprise IT shared services budget, and enterprise IT doesn’t make the decisions for administering it. Shadow IT includes purchases of SaaS (like Salesforce), AWS cloud and colocation, or Rackspace. It’s also the teams of people hired by the business (but not put into corporate IT) who do development and application support or PC support.

Read more at Peter’s blog on CIO online

Why Next Gen CIOs Are Actively Promoting “Shadow IT” | Gaining Altitude in the Cloud

October 9, 2012

The conventional thinking about business-led adoption of cloud services in the enterprise goes something like this:

Frustrated by a non-responsive IT organization, business users become attracted to the innovation, speed, and flexibility offered by cloud vendors and solutions
Fearing loss of control, corporate IT puts the brakes on deployments and projects of which they become aware
Undaunted, business users “swipe the credit card and go” to the cloud anyway, around and outside of normal IT procurement processes
CIOs and IT executives are shocked to learn that cloud adoption is going on behind their backs

And while many enterprise IT departments frequently spew the terms “rogue IT,” “shadow IT,” and “end-running IT” at this phenomenon, progressive CIOs are actually encouraging this behavior as a way to gain leverage and scale with a limited IT budget.

CIOs have a finite set of time and resources to accomplish what is asked of their IT organizations. Many enterprises facing significant cost pressures and budget constraints must focus almost exclusively on supporting, maintaining, and enhancing core, mission critical systems. Think trading platforms for capital markets firms, or claims processing for insurance companies. IT can support only so many new projects requested by the business, and every CIO needs to draw the line somewhere on the project list.

For projects that fall below corporate IT’s project cut line, the cloud is a win-win proposition. Business stakeholders can go ahead and acquire from a third party the capabilities they are seeking. IT ends up with a happier internal customer. And the organization overall can effectively attain greater scale from its IT budget and headcount by pushing the business to cloud providers.

As one CIO recently commented to us, “I actually want our business users to go to the cloud. I want them to ask cloud vendors the right questions, and, of course, I want to make sure they’re not doing anything that touches our mission critical apps. But other than that, I’m happy for them to go out to get what they need.” Of course, one of the keys here is the right questions, such as those focused on critical topics including security, data ownership, integration, availability, disaster recovery/business continuity, etc.

There’s no doubt that many CIOs are surprised internal developers are using Amazon Web Services (AWS), or that marketing is building its own custom apps on salesforce.com. The more unanticipated but understandable fact is that many of them are actually relieved to have this extra weight lifted off their heavily-burdened shoulders.

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Tag: shadow IT