Shadow IT

The Upside of Shadow IT

Tech-savvy employees have long bypassed IT to get their hands on hot technologies. Rather than standing in the way, smart CIOs are now embracing and even encouraging shadow IT. Here's why.

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Instead of fighting to retain control, IT leadership should focus on managing risk and learn to spot where employees are adding value with their self-provisioned tools and services, says Brian Lillie, CIO at Equinix, a Redwood City, Calif.-based company that operates large data centers in 13 countries.

Workers in Equinix's vertical marketing group used the Amazon cloud to build what Lillie describes as "a very slick sales tool" that measures network latency around the world, depending on where your IT assets are located.

"My team didn't do it, but I still like to brag about it. It's a key tool," Lillie says. Now, IT is exploring how to integrate the tool into other systems at the company.

"Instead of us throwing up roadblocks, we said, 'Let's enable this and give these guys a way to exploit it,' " he says. "It definitely requires a mind shift [for IT]. "But people are creative and want to innovate, and sometimes real breakthroughs can come from anywhere."

Get ahead of the demand

New York-based Sesame Workshop, the producer of Sesame Street, has more than 100 employees working with outside vendors to make interactive games and toys licensed by the nonprofit organization. They were using cloud and consumer technologies, such as YouSendIt, a digital file delivery service for exchanging large design and video files. CTO Noah Broadwater took notice, and then contacted YouSendIt to secure an enterprise version of the popular service.

The upshot: "IT has become a trusted business partner. It now helps users with contracts," says Broadwater.

The IT group also launched a dedicated R&D group that focuses specifically on consumer technologies and works on projects dealing with how to best leverage Facebook, Google, Twitter and mobile devices. Broadwater is fond of pointing out that Sesame Street character Big Bird has been tweeting for the last two and a half years.

"By having early adopters in IT and getting ahead of technologies, users will now come to us when they want to use something like Basecamp [a Web app for storing, coordinating and managing projects]," Broadwater explains. "When they do, we tell them about Central Desktop," which he describes as a similar cloud-based project management service "but with better integration into the enterprise."

Today, Sesame Street co-producers in offices as far away as Afghanistan and Pakistan can upload rough cuts of video to the cloud, and producers in New York can edit and annotate it, he says, noting that 30% of expenses within the official IT budget at Sesame Workshop are devoted to cloud services, consumer services and mobile enablement.

"IT used to be dictatorial, issuing edicts and hammering on security, security, security," Broadwater says. "Now, we've moved to where we're a service organization."

Broadwater also notes that what was once considered shadow IT has also saved the company money. For example, the enterprise YouSendIt service, which costs $50,000 for two years, replaced FTP services that were costing $140,000 for the same period. Similarly, before using Central Desktop, staffers were physically shipping hard drives. The cloud-based service has cut those costs by $20,000, Broadwater says.

At Equinix, Lillie set up an "Amazon sandbox" for developers who were buying Amazon's cloud services on their own to develop apps.

Developing apps on Amazon, he says, is great "because it doesn't tax IT's resources. But as opposed to employees pulling out their credit cards and paying for Amazon on their own, why not give it to them? You become part of shadow IT and the lines start to blur," he says. "IT is expanding its influence, and more importantly, you're working as a team."

But there is a downside.

"The challenge is that sometimes when something has been OK'd, then it's not cool," says Lillie. "There's a coolness to being in the shadows, which drives me nuts."

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