Cloud computing has opened the floodgates to a seemingly limitless array of web-based apps and services. With just a click, teams can spin up powerful collaboration tools, data analytics engines, AI capabilities—the list goes on. It's easier than ever for employees to access cutting-edge technology, and that's great news for driving productivity and innovation.
However, this software revolution has also introduced new headaches for IT teams. As lines have blurred between consumer-grade apps and enterprise software, the "shadow IT" phenomenon has exploded. Employees at all levels now have the ability to independently adopt cloud-based tools across departments—often without formal approval or oversight.
And that can get risky...quickly.
What Is Shadow IT?
Shadow IT refers to any hardware, software, or application within an organization that is used without formal approval from IT leadership. As today's workforce has become increasingly tech-savvy, it has become very easy for employees to sign up for cloud-based apps and services without oversight.
Employees often turn to shadow IT tools to fill gaps left by corporate-approved software. For example, your company may lack an intuitive project management system. Tired of bounced emails and messy Excel sheets, a team leader decides to subscribe to Asana or Trello without informing IT.
While seeking shortcuts is human nature, shadow IT can open dangerous security holes and compliance risks. Even popular apps like G Suite or Slack collect troves of company data with little visibility for IT staff. What if that data contains sensitive information? Who owns it? How long is it retained? These questions often go unanswered.
The Scope of the Issue
The prevalence of shadow IT may shock you.
- 42% of the average company's applications are adopted through shadow IT without formal approval or oversight. That means nearly half of all software used within typical enterprises essentially becomes invisible to IT teams.
- 30–40% of IT spending at large companies ends up funding shadow technologies. This encompasses everything from cloud software subscriptions to unauthorized SaaS apps accessed by employees.
- Nearly 1 in 2 cyberattacks stem from vulnerabilities introduced through shadow IT, whether intentional insider threats or accidental exposures. The more apps adopted without security vetting, the wider the attack surface grows.
Given the stats, it's safe to say shadow IT is not some fading trend or minor nuisance. It's a runaway train that's gaining speed every year.
Risks and Downsides of Shadow IT
So why does shadow IT cause so much worry? What threats does it pose besides uncontrolled spending?
- Data breaches – Apps adopted without oversight often lack security best practices. They increase attack surfaces and introduce risks like phishing scams, malware attacks, and data leaks.
- Compliance violations – Many cloud apps don't meet regulatory data standards. For example, PHI or PII data stored in Google Sheets could violate HIPAA or GDPR.
- Poor data hygiene – Shadow IT systems lead to company data sprawl. Without knowledge of where data resides, it's impossible to classify sensitivity levels or set policies for access and retention.
- Business continuity risks – If an app is not under IT support, what happens when it goes down? Who will troubleshoot and restore business operations? Uptime and continuity guarantees disappear with shadow IT.
- Cost overruns – Unsanctioned spending on software leads to all kinds of budgetary headaches. IT teams lose visibility and control over expenses.
Clearly, allowing shadow IT to flourish puts organizations in serious jeopardy. So what's the solution? Banning cloud apps altogether would be next to impossible, not to mention unwise. A better approach is bringing shadow IT out of the shadows through careful monitoring and policy changes.
Gain Visibility Through Cloud Access Security Brokers
The first step is knowing precisely what shadow IT apps are used and what data moves through them. For complete visibility, organizations are increasingly turning to cloud access security brokers. But what is a cloud access security broker (CASB), and how can it help guard against the rise of shadow IT?
Simply put, CASBs are on-prem or cloud-hosted solutions that sit between users and cloud apps. They track app usage while securing access and setting policy guardrails:
Here are some key capabilities a CASB can provide to rein in shadow IT:
- Full visibility – Discovers all sanctioned AND shadow cloud services that get used across the enterprise.
- Risk-based app blocking – Prevents access to unapproved apps posing security, compliance, or governance risks.
- Advanced policy enforcement – Applies granular data handling rules to enforce security controls.
- Data masking – De-identifies sensitive information before it leaves the corporate network.
- Anomaly detection – Uses machine learning algorithms to detect abnormal usage patterns and potential threats.
- Data exfiltration prevention – Automatically flags and blocks anomalous data movement indicative of theft.
By partnering with leading CASB vendors, you can uncover shadow IT apps right from your existing network firewalls and proxies. Bringing shadow IT out of the shadows is the critical first step toward positive change.
Change the Conversation
Visibility brings awareness, but real change requires cultural shifts. Employees often resort to shadow IT when formal channels seem slow, clunky, or dismissive of their needs. IT then needs to create an environment where business teams feel empowered to ask for better tools while understanding the shared risks. Here are some first steps:
- Communicate risks company-wide – Run security workshops to align all employees on shadow IT hazards. Arm them with talking points they can use to educate colleagues.
- Streamline approval processes – Make requesting new software easy through self-service portals with standardized workflows. Provide clear criteria that speed time-to-value for safe apps.
- Solicit feedback – Ask business units what tools they need to collaborate and better serve customers. Be receptive by listening first instead of policing.
- Pilot new technologies – Designate sandboxes where users can trial new apps prior to enterprise-wide contracts. Set terms where tools are disabled automatically after the pilot unless purchases are approved.
- Enforce procurement rules – Strongly discourage side-channel software buying through measures like blocking unauthorized credit card usage. Keep policy exceptions to an absolute minimum.
Final Thoughts
Dealing with shadow, IT starts by facing reality—it's always here and growing. However, risks can be mitigated with the right balance of security guardrails and business enablement. Lean into modern approaches like CASBs for oversight while opening dialogue around safer collaboration.
If you take only one lesson from this guide, let it be this: employees will continue finding new tools whether IT approves or not. So, instead of playing catch-up, get ahead of the needs that drive shadow IT adoption in the first place. Empower your users, and they'll partner with you, not work around you.
