Growing reliance on cloud will need tighter IT management

Managing cloud-based IT assets

Given that cloud computing will become a larger and larger part of enterprise IT, AJ Witt, an industry analyst at The Itam Review, recommended that IT departments prepare a strategy for managing cloud-based IT assets.

“Cloud services are very transactional. You can have a free account and buy them through a credit card,” he said. “The main challenge for traditional IT is that such cloud services are being  bought outside of IT.”

While a Microsoft Office contract might take months to buy through traditional IT procurement, he said a cloud service such as Slack could be bought straight away, without IT’s knowledge.

Without sufficient oversight of the spending, a business’s cloud bills can quickly add up. For Witt, the situation is analogous to people who have both an Amazon Prime and a Netflix subscription. Users will not be using both services 100% of the time, which means the subscriptions become underused. 

Regarding cloud-based IT services, Witt said: “Your internal costs are high and there is 30% wastage.” In his experience, this occurs when a business buys a cloud subscription bundle and then delays deploying all the subscriptions it acquired. Some of these subscriptions may never get used, leading to wastage in terms of the number of cloud subscriptions.

He said the business model of cloud providers is to encourage customers to buy and consume more of the services being offered. “Salesforce will typically stipulate a minimum number of seats and a minimum subscription growth. You are really pre-committing to spend more than you are currently using,” said Witt.

IT departments with mature IT service management procedures should be well-prepared, with tools and dashboards to buy IT capacity up-front. This often occurs as and when they acquire enterprise storage, networking or servers and need to forecast how demand will grow over a pre-determined time, such as two to five years before the IT asset is written off.

Witt believes the same principals need to be applied when acquiring cloud services. “If your IT management is mature, you should be able to understand how your capacity will grow,” he said.

But use of some cloud products is more dynamic. “You may use a cloud product for a few months then usage dies off,” he said, but the business will continue to pay for the subscription, leading to wastage, unless there is a way for IT to bring back the unused subscription so that it can be re-used by another user. He cited Adobe Creative Cloud as an example: “It may be used for one marketing campaign, and then not used for nine months.”

Another problem is when people buy a more feature-rich subscription than they require. “With Salesforce, you may have an ‘all-you-can-eat Ninja account’, but do you really need this if you only need to read a sales report at the end of the month?” Similarly, he said people buy the full AutoCAD suite when they are only viewing CAD diagrams – something that can be easily achieved with the free viewer software.

If Gartner’s forecasts are correct, a significant proportion of business applications will be accessed as cloud-based subscription services. Witt said IT departments must start to take back control.

“This is about cloud control and regulations like GDPR [General Data Protection Regulation] and PCI [Payment Card Industry Data Security Standard],” he added. The business needs to be aware where customer data is being stored. Unauthorised cloud services pose a regulatory compliance risk for business. IT must also be involved in the joiners and leavers HR process to make sure cloud subscriptions are set up for new staff and relinquished when employees or contractors leave.