In many ways, the race to the cloud resembles the Wild West of the 1800s. The urgency with which business groups are rushing to adopt cloud services, often without IT involvement, resembles the race out to the western US of those looking for gold. With our customer engagements, we have found that there are 5-10 times more cloud applications being used than IT is aware of.

With this rapid rise in shadow IT, organizations are seeing their costs skyrocket as they lose visibility of how much they are spending on cloud services. For example, we worked with a business that discovered it was using well over 600 vendors (and wasn't aware of 90 percent of them) and spending millions. Shadow IT has been forecasted by CEB to be as high as 40 percent above the IT budget.

The influx of investment in new cloud ventures is also leading to a land grab by cloud service providers, some which are on shaky ground. According to Gartner, only one in four cloud vendors will exist in 2015 due to acquisition or being forced out of business. This leads to risk for organizations that need to ensure continuity of their business applications. Finally, just as the Wild West was filled with dangerous towns and outlaws, cloud services carry business risks if organizations don't have strong cloud risk and compliance strategies.

Despite this, organizations are keen to brave this new frontier to capitalize on the benefits of cloud. Cloud services help organizations become more agile, reduce costs, and can simplify IT infrastructure. However, to reap these benefits IT teams need a different way of governing the new territory of cloud.

Managing a world of public, private, and hybrid clouds requires IT to build in-house cloudsandbroker services from public cloud providers to meet the needs of business groups. Thus, IT needs to evolve from an operator of technology to a sheriff that manages cloud adoption with a new approach to governance to help manage risks and costs and to quickly adopt new cloud services.

Based on Cisco IT's own experience managing more than 1,000 cloud services and our experience working with customers, we have outlined a high-level view of a lifecycle approach needed to govern cloud adoption.

To tame the Wild West of cloud, organizations need to establish a holistic approach to manage cloud adoption built on three pillars.

1. Monitor cloud usage and plan a successful cloud strategy

A successful cloud program begins with a solid approach to planning. Organizations need to put in place tools and processes to monitor cloud usage across all clouds to discover shadow IT and understand how the organization is using cloud. Based on this insight, IT can then create a holistic cloud strategy aligned to its enterprise architecture, a budget and cost model, and an approach to manage a portfolio of cloud service.

2. Establish new methods for procuring and deploying cloud services

Organizations need to establish procurement strategies to assess the risk of vendors, select and negotiate with vendors, devise solid contracts that protect against risk or compliance exposure and ensure data integrity, and finally transform their infrastructure to be cloud ready. Once services are selected, processes need to be put in place to deploy new services and encourage adoption including provisioning, migration, testing, training and integration.

3. Define new cloud operations and governance programs to run cloud services

For IT to truly evolve into a broker of cloud services to internal business groups, they need to adopt a new cloud operational and governance model. This starts by establishing a program office capable of providing user support, training IT staff, continually operating systems, and introducing and managing an approved cloud vendor catalog. This office would also be key in establishing strong cloud governance framework, processes, and tools, and ensuring regulatory compliance and audit preparedness.

By adopting a holistic approach to managing cloud services, organizations can deliver services to meet the needs of lines-of-business faster, mitigate risk exposure, remain compliant, and reduce costs.

This is a very high-level view of what businesses must consider in order to establish a new approach to manage cloud services. The devil is in the details of implementing a new cloud governance model.

Every day, I speak with customers who are on their new journey of westward expansion towards the world of many clouds. My team also works with customers to uncover shadow IT and help them establish processes to manage cloud. In the coming months, I will be publishing regular blogs diving deep into areas that organizations need to think about as they establish better cloud governance strategies. I look forward to a lively discussion regarding the benefits and challenges you face in taming the new Wild West!

Learn more about how Cisco can help you understand your cloud usage and manage cloud adoption at: www.cisco.com/go/cloudconsumption