VMware Study Reveals Increasing Quantum of IT Decentralization in India, Company Costs on a Rise

Decentralization is causing IT’s job to become more challenging, by introducing a shift in expectations.

VMware Inc., cloud infrastructure and business mobility enterprise, announced findings from a study commissioned by VMware – 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.

Many 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 a 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 cybersecurity, 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 percent). Almost 73 percent 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.”

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.

Key Findings:

• IT decision makers and line of business leaders across India agree the purchasing (83 percent) and management (80 percent) of IT within their organizations such as applications, hardware and cloud services, has become increasingly decentralized in the past three years.
• The Majority of respondents believe the decentralization of IT gives the business more freedom to drive innovation (80 percent); increases responsiveness to market changes (86 percent); enables them to launch new products and services to market more quickly (85 percent), and helps to attract better talent (78 per cent).
• However, many respondents also indicated that the decentralization of IT has led to the purchasing of non-secure solutions (73 percent); applications being developed outside of corporate or government regulations (77 percent); and a lack of regulatory compliance for data protection (69 percent).
• 83 per cent of respondents feel that the IT department should be responsible for driving innovation across the organization, and currently, there is a lack of clear ownership and responsibility for IT within their organization (69 percent).
• Almost half (47 percent) of respondents agree or strongly agree that the IT department has had no control over the decentralization of IT.
• 86 per cent of Indian IT decision makers and line of business leaders indicated that cloud computing has made it easier for lines of business to purchase their own IT. This has led to an average of eight additional cloud services being purchased outside of the IT department per organization.
• 80 percent of IT decision makers and line of business leaders in India indicated that the decentralization of technology is increasing costs or spending within their organizations.

The State of the Cloud 2016 research draws its conclusions from two different surveys, both commissioned by VMware in the first half of this earlier this year. Together, the survey results tell the story of decentralization both disrupting the enterprise and driving innovation.

The first, called The IT Archipelago, was conducted in March of 2016 by the Economist Intelligence Unit (EIU) and targeted 726 people distributed equally across the Americas, Asia-Pacific, and EMEA. All the respondents were directors or above, from companies with an average revenue of US$2.1 billion, and representing 20 industries. Half of those surveyed were business decision makers and half IT decision makers.

The Vanson Bourne survey conducted in September of 2016 targeted 3,300 people from 20 countries split across the Americas (24 per cent), Asia-Pacific (39 percent), and EMEA (36 percent). The respondents represented 20 industries, with an average company revenue of US$3.7 billion. Half of those surveyed were business decision makers and half IT decision makers.