IT Decentralization Driving Up Company Costs

by CXOtoday News Desk    Nov 28, 2016


The increasing decentralization of IT in India is driving up the company costs in the past three years, a new study by VMware has revealed. According to the study, the decentralization of IT has led to the purchasing of non-secure solutions and lack of regulatory compliance of data protection. 

Global cloud solutions provider, VMware, today announced key findings from a VMware-commissioned study – The State of the Cloud 2016, conducted by Vanson Bourne. The study addresses one of the most significant impediments to digital business innovation in India: the decentralization of IT and its detrimental effect on enterprise operations.

Through the research findings, VMware highlighted that IT departments are being sidestepped by business leaders who adopt their own cloud-based technologies to innovate faster and meet growth objectives. At the same time, IT departments are left to shoulder responsibility for things that go wrong. This raises a pressing need for IT to adopt a common operating environment for all clouds to mitigate complexities, inefficiencies and security risks, and more importantly, simultaneously enable innovation.

The research found that enterprises in India face high levels of IT decentralization, with more than 80 per cent of local respondents – one of the highest in the Asia Pacific and Japan region – agreeing that the management and procurement of IT are taking place outside of IT’s purview, and driving up company costs.

Line of business leaders feel that IT is not moving fast enough to support the business and its drive for innovation. This has given rise to decentralization and multi-cloud adoption, with line of business leaders in local firms purchasing an average of eight additional cloud services without consulting their IT departments – the highest in the Asia Pacific and Japan region.

The Vanson Bourne study also dived deeper into cyber security, a key topic explored by a VMware-commissioned Economist Intelligence Unit (EIU) study, which was launched earlier this year. Vanson Bourne found that IT departments are finding it difficult to manage multiple clouds, with almost three-quarters of local respondents agreeing that decentralization increases their firms’ vulnerabilities to hacking and cyber-attacks (74 per cent). Almost 73 per cent also indicated that lines of business are purchasing non-secure solutions. 

Overall, the research reinforced that decentralization is causing IT’s job to become more challenging, by introducing a shift in expectations on how they should be supporting the business. Almost nine in 10 respondents now believe the IT department should be responsible for enabling other lines of business to drive innovation, but must set the strategic direction and be accountable for security and compliance.

“The research results validate what we’ve been hearing from our customers – most organizations have a hybrid cloud environment, with workloads and applications across different platforms,” said Arun Parameswaran, managing director, India, VMware. “The challenge for local CIOs is to continue enabling their companies to innovate and meet growth objectives, and yet effectively manage and secure applications dispersed across multiple cloud environments. VMware Cross-Cloud Architecture™ responds directly to this challenge by offering cloud freedom and control”, he added. 

To help organizations reconcile the priorities and objectives of both business leaders and IT decision makers in today’s multi-cloud landscape, VMware has extended the company’s hybrid cloud strategy with the VMware Cross-Cloud Architecture, enabling customers to run, manage, connect, and secure their applications across clouds and devices in a common operating environment. A new set of Cross-Cloud Services which VMware is developing, will enable enterprises to manage, govern and secure applications running across public clouds, including Amazon Web Services (AWS), Azure and IBM Cloud.

In addition, VMware Cloud Foundation offers a new “as-a-service” option that delivers the full power of the software-defined data center (SDDC) in a hybrid cloud environment.