Stuart Gentle Publisher at Onrec

Covert Clouds: Employees Spending £1.4 Million on ‘Off-Radar’ Cloud Per European Business

VMware Research Reveals IT Decision Makers Understand Benefits of Off-Radar Clouds but more than three quarters are concerned by the Increased Security Threats

VMware, Inc., the global leader in virtualization and cloud infrastructure, today announced research that 37% of European IT decision makers suspect staff have purchased cloud services without the IT department’s permission – in the UK this was even higher at 44%. However, VMware’s research suggests this isn’t necessarily a negative trend, with many organisations embracing the fact that this spend – an average of nearly £1.4 million per affected business in 2012 – can deliver major benefits to the business.

Nearly three quarters of IT decision makers across Europe suspecting off-radar cloud spend think it is beneficial (72%). Of these respondents, almost a third (31%) said covert cloud spending enables the business to improve growth and innovation, while in the UK, more than half (53%) said it provides a solution that isn't available within the IT function, and 38% said it allows the business to respond faster to client demands. However, more than three quarters (77%) said while off-radar cloud spending is beneficial it also increases security threats, creating a conflict between the growing demand for IT flexibility with the need to maintain control and reduce the management burden.

The research, conducted by Vanson Bourne and commissioned by VMware[1], also explored the views and opinions of 3,000 office workers across Europe on how they use cloud products and services to work effectively. In the UK specifically, two in five of UK office workers (42%) would use or purchase unapproved cloud services to get a job done and over a third (36%) already have. Furthermore, the UK’s knowledge workers are the biggest covert cloud spenders, with 60% saying they would use these services without the IT department’s permission.

“The research reveals a staggering amount of off-radar cloud spending within in European businesses but it is not necessarily money being squandered. Office workers note they are often circumventing the IT department to buy cloud services to work more effectively for the good of the company,” said Joe Baguley, chief technologist at VMware, EMEA. “The IT department has reached a tipping point where it’s no longer an option to ignore the reality of off-radar cloud spend. IT decision makers need to embrace it, providing the flexibility that staff require, while managing it in a way that is suitable and secure for the business.”

Nearly a quarter (23%) of office workers have downloaded and paid for such products or services and in the UK admitted to spending over £1,500 on covert clouds, while many across Europe spent significantly more. Italy, Germany and the Netherlands had the most prolific off-radar cloud spenders: 22% of Italians spent more than €5,000, followed by 19% of Dutch people and 17% of Germans.  Almost a tenth of office workers in the UK (9%) spent over £5,000 each.

The research highlighted both why and how office workers are bypassing IT protocol. Respondents’ motivations include maintaining competitiveness, through launching new product or service offerings (18%), and finding quicker and more efficient ways of working (30%). Many (65%) are putting through cloud spend under the radar via their departmental budgets (43%), expenses (38%) and company credit cards (33%).

The survey reveals that IT decision makers were planning to implement 27% of these cloud applications and services anyway, which could indicate that it is saving the IT department money from its own budget allocation but not the organisation as a whole. It would appear there is a further opportunity for greater alignment between the business units and central IT department – incorporating employees’ requirements to shape future IT strategy.

“While off radar cloud spending is inevitable in almost any organisation, the most important thing is how the IT department responds,” commented Lee James, Head of IS Architecture and Strategy, Betfair. “Rather than blocking these cloud products, which can stifle productivity and other benefits, IT needs to position itself as the ‘broker’ of cloud services to drive assessment, adoption and value.”

“While many within European companies recognise the benefits of off-radar cloud spend, action needs to be taken,” continued Baguley. “Almost half[2] of IT decision makers are asking for greater dialogue with the departments involved. It’s great to see employees taking the initiative to drive innovation and growth but this could come at a premium. A proactive approach from IT, with appropriate levels of management, security and visibility, can ensure that covert clouds become a competitive differentiator and don’t become a threat to the business.”

Exploring the covert cloud investment further, IT decision makers suspect that some of the most prolific covert cloud users are in the following departments:

  1. Marketing/advertising/communications (Europe - 43%/ UK – 59%)
  2. Sales (Europe - 33%/ UK – 39%)
  3. Research/product development (Europe - 31%/ UK – 34%)
  4. Finance (Europe - 23%/ UK – 25%)

If we analyse the UK responses from office workers who have used these off radar products (whether free or not), without official sign off from the IT department, then the top five cloud products and services used include the following list. This highlights the security risk the IT department need to be aware of regardless of the monetary cost to the business.

  • Data and file sharing services (54%)
  • Cloud based email (44%)
  • Instant messaging (42%)
  • Video conferencing (32%)
  • Application or data hosting such as Amazon Web Services or Rackspace (22%)